Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

DEATH OF A MEMBER

Mr. Speaker: I regret to have to inform the House of the death of Brynmor Thomas John, esquire, Member for Pontypridd, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — ENVIRONMENT

District Authority Committees

Mr. Atkinson: To ask the Secretary of State for the Environment if he has received any representations on day-time meetings of district authority committees.

The Parliamentary Under-Secretary of State for the Environment (Mrs. Virginia Bottomley): No, Sir.

Mr. Atkinson: Does my hon. Friend agree that district councils which choose to hold their committee meetings during the day preclude many good people, from all political parties, from standing as local council candidates? Will she consider including in the forthcoming legislation on the conduct of local authority business a provision that such meetings should be held after normal working hours whenever practicable?

Mrs. Bottomley: Before answering my hon. Friend, I wish to inform the House that my right hon. Friend the Secretary of State is undertaking an official visit to China to demonstrate the Government's support for China's efforts in tackling pollution problems and other matters. He cannot, therefore, be here today.
My hon. Friend the Member for Bournemouth, East (Mr. Atkinson) made an important point. However, it is for local councils to decide when to hold council meetings. The desire to encourage all people possible to serve on local councils is clearly vital to the future of local government. There are often special factors in rural areas, such as people having to travel long distances. We do not propose to legislate to cover that matter, but we hope that councils will have regard not only for serving councillors but for those who might otherwise be excluded.

Rating Reform

Mr. Marlow: To ask the Secretary of State for the Environment if he will make it his policy to inform people of the effects on the community charge of profligate local authorities.

The Minister for Local Government (Mr. John Selwyn Gummer): I shall take every opportunity to inform voters that profligate spending by local authorities will lead to high community charges.

Mr. Marlow: My right hon. Friend is a considerate man; he is also a very intelligent man. He understands about gearing—in other words, that for every £1 that a local authority increases its expenditure the community charge payer will have to cough up an extra £4. If we look around the country at Labour local authorities and assume that they spend a little over 10 per cent. more than Conservative local authorities, which is highly likely, that will increase the community charge by just over 40 per cent. or almost £100. We know that my right hon. Friend would not want to indulge in low politics as he is a fair man and a Christian, but will he make everyone in this country aware that, although we agree that everybody who is entitled to vote should vote, the cost of voting Labour at next year's local authority elections could be £100 per vote?

Mr. Gummer: My hon. Friend is kind in his remarks, but the facts are clear. If there were a community charge this year, the average in Conservative-controlled authorities would be £196·40 per year and in Labour-controlled authorities £294·40, so there is almost £100 difference.

Mr. Mullin: Has the Minister seen recent reports that the poll tax will result in the transfer of about £800 million from the north to the south? Can he, as a Christian, tell us how it is possible to justify the poorer parts of the country having to transfer wealth to the richer parts?

Mr. Gummer: The hon. Gentleman has misunderstood the reports. The revaluation of the business rate will have the effect of transferring almost £900 million from the south to the north.

Mr. Cormack: Will my right hon. Friend ensure that any expenditure on protecting egg farmers is not counted as profligacy?

Mr. Gummer: Sometimes when one is moved from one Department to another one has much for which to thank the Almighty.

Mr. Blunkett: Will the Minister be good enough today to answer the question that he declined to answer on Monday and say how much money he intends to spend on profligate propaganda publicising the Government's case on the poll tax, including the leaflet published yesterday? How much does he intend to spend on telling the voters of Westminster what was said in the Audit Commission's report, published on 6 December, about the way in which the scandalous sale of cemeteries for 15p has resulted in the electorate of Westminster being faced with a £5·5 million bill to repurchase them?
Does the right hon. Gentleman intend to take action against Lady Porter in the same way that he took action against Labour councils during recent years? If so, will he couple that with surcharging his hon. Friend the Parliamentary Under-Secretary of State for Health for the £500,000 that she has cost the country by opening her mouth once too often?

Mr. Gummer: I welcome the hon. Gentleman to his new job on the Opposition Front Bench. I assure him that the Government will spend no money on propaganda.

Sir Geoffrey Finsberg: To ask the Secretary of State for the Environment what information he has as to what a typical ward sister would pay in (a) rates, (b) community charge and (c) a system of capital value rates plus local income tax paid in the proportions of 80:20, respectively, if she lived in a typical one-bedroomed flat in the London borough of Camden.

Mr. Gummer: A ward sister earning £15,000, living in a flat in Camden worth £70,000 with a rateable value of £300, would pay a rates bill of £635, a community charge of £639, disregarding the transitional safety net, and £2,030 under a system of capital value rates plus local income tax.

Sir Geoffrey Finsberg: Can I assume that my right hon. Friend will take every opportunity to produce, for the benefit of those citizens unlucky enough to live in boroughs such as Camden, factual information about the effects of the policies of the Labour party if it were ever given the chance to put them into effect?

Mr. Gummer: Yes, the double tax that Labour proposes would cost a ward sister more than £2,000 per year, but it is particularly bad in Camden because Camden's overspending is £637 per adult. If it brought its overspending down to what it needs to spend, it could have a reasonable community charge. The effect on the community charge is serious in a borough which does not seem to be able to bring its spending under control.

Dr. Cunningham: How does the Minister expect us to believe that rigged question and fiddled answer when he has completely disregarded the loss to Camden ratepayers of £151 million as a result of the Government's national business tax—a cost to each person in Camden of £824? As he is concentrating on nurses in Camden, perhaps he will tell the House how a nurse earning £15,000 or £20,000 per year can possibly afford the average one-bedroomed flat in Camden which costs more than £100,000. Is he not aware that at the royal free hospital Portakabins are being installed in the car parks because nurses cannot afford to rent or buy homes in the borough as a result of the Government's policies? After their treatment at the hands of the Government and this farrago of fiddled figures and dishonest replies nurses in Camden will treat the Government's answer with nothing but contempt.

Mr. Gummer: rose—

Mr. Speaker: Order. I think that "dishonest" in the context of replies made by a Minister is not a parliamentary expression. Will the hon. Gentleman withdraw that?

Dr. Cunningham: I will certainly withdraw the word "dishonest", and use the phrase "grossly inaccurate" instead.

Mr. Gummer: I am extremely pleased that the hon. Gentleman has now confirmed that the Labour scheme would produce a figure of £2,000 because he has failed to reply to my letter asking for the information, as has the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). It is barefaced cheek for him to come to the House and complain about a reply when he has refused to give the public the facts. He knows perfectly well that any loss that may be thought to come from the business rate will be made up in the needs grant. Perhaps the hon.

Gentleman does not understand the principle, but the fact is true that the hon. Gentleman has produced a plan in place of rates and community charge which he knows would not work and if put into operation it would saddle every nurse with a bill of £2,000.

Mr. Robert G. Hughes: Does my right hon. Friend agree that the Labour party has shown, by its questions today and its plans for local income tax and the double tax, that it has entirely abandoned the south of England and wants to spread the disastrous policies of Camden to the rest of London and devastate people's lives there, too?

Mr. Gummer: My hon. Friend will have noticed that the hon. Member for Copeland (Dr. Cunningham) tried to deflect the question because he knows that in every case, when the figures come out, the scheme proposed by the Labour party would be demonstrably devastating to Labour-controlled areas because overspending makes them impossible for people to live in.

Housing Act 1988

Mr. Flannery: To ask the Secretary of State for the Environment if he will give (a) the number of bids for transfer of local authority property to another landlord registered under parts IV and V of the Housing Act 1988 and (b) the names and locations of the prospective landlords.

The Parliamentary Under-Secretary of State for the Environment (Mr. David Trippier): Part IV of the Housing Act 1988 is not yet in force. Powers for the Housing Corporation to approve landlords will be commenced in the new year. Voluntary transfers by local authorities take place under powers in the Housing Act 1985, not part V of the 1988 Act. There are a considerable number of such transfers each year, some of which take place under general consents and are therefore not notified to the Department.

Mr. Flannery: Do we understand that the Conservative party not merely openly and publicly advocates vote rigging but will continue to enshrine it in law? What would the Minister say if other organisations even dreamed of such a thing, as they never would, or if the trade unions carried on in the way the Conservative party does? Why does an abstention mean a yes vote?

Mr. Trippier: If a campaign has been waged and different approaches and different appeals made by housing associations and private landlords put to the tenants as opposed to the local authority, people can vote yes for the move to the housing association, for example. If they say no, they will vote under the tenants' choice to stay with the local authority. That is enshrined in the Act. If by the time campaigning has gone ahead they cannot make up their minds, it would be wrong for those people to destroy the chances of tenants who desperately want and seek that change. The hon. Gentleman's point is an extension of the Labour party's campaign of misinformation, which is similar to the campaign that it ran against the right to buy. It failed then and it will fail again.

Mr. Wilshire: Does my hon. Friend agree that if certain councils spent less time churning out propaganda aimed at undermining the Government's housing policies and


legislation, and more time dealing with the empty houses that they own, repairing houses and collecting rent, local people would get a far better deal and far better houses?

Mr. Trippier: I agree with all that. If local authorities spent more time turning round the number of empty properties that they have, there would be a net increase of 20,000 houses brought on to the market. It is not only local authorities but certain trade unions, certain members of the Socialist Workers party and certain members of Militant who are peddling this misinformation.

Mr. Matthew Taylor: The Minister has correctly told the House that the present transfers are not going ahead under the 1988 Act. He then said that, nevertheless, tenants who vote against transfers will be able to stay with a local authority. That is not the case with transfers that are happening now, and certainly not the case in Torbay, where well over 20 per cent. tenants voted against but if the Minister allows the transfer to go ahead all those tenants, irrespective of how they voted, will be involved in the scheme. How do the Government intend to protect those people's democratic rights?

Mr. Trippier: The hon. Gentleman would not expect me to prejudge the decisions of my right hon. Friend the Secretary of State. All that I can say today is that we shall shortly be in touch with Torbay council about the matter.

Mr. Patrick Thompson: While Labour Members talk about the rights of council tenants, the Government have given council tenants new incentives and opportunities. Can my hon. Friend confirm that we shall continue to do that?

Mr. Trippier: That is the whole point. The Opposition parties—I use the plural advisedly—spend a great deal of time talking about extending benefits to tenants but do nothing, whereas the Government have extended the freedom of choice to those tenants. It has been exercised through the right to buy, which the Opposition do not like to mention because it has been enormously successful. That same freedom will be extended to more and more tenants as the 1988 Act becomes effective.

Mr. Soley: The Minister's propaganda might be more convincing if he could tell the House that he is prepared to extend that right to the tenants of non-resident private landlords, because we shall do that.
I give the Minister this opportunity to do what he undertook in the House to do—to correct the misleading information that he published by joining me at a joint press conference after the National Consumer Council, which is chaired by a former Conservative Member, and the Institute of Housing have analysed the leaflet that he distributed. and which I have described as grossly misleading propaganda. If that is done, we shall then know who is telling the truth—and it will be our side that wins, not the Minister's.

Mr. Trippier: I welcome a debate on those issues at a place and time of the hon. Gentleman's choosing. There has already been one major debate on the subject, when we debated the Lords amendment. The hon. Gentleman will recall that I extracted from him confirmation that he would publicly denounce leaflets or information classified as misleading or misinformation. He will be pleased to learn that I shall be writing to him this week giving examples of leaflets sent to tenants which are clearly

misleading. I hope to extract from the hon. Gentleman the public denouncement of them that he promised just a few weeks ago.

Mr. Harry Greenway: Will my hon. Friend draw the attention of the hon. Member for Hammersmith (Mr. Soley) to the highly misleading and downright dishonest document on the Housing Act 1988 published by Ealing council and the meetings at which tenants were told that if they voted to join a housing association their rents would be doubled and they would have no rights? The BBC did not correct that misinformation in its "Panorama" programme and has not made it clear that any secure tenant wishing to remain with the council can always do so. Will my hon. Friend make that clear?

Mr. Trippier: I confess that I have not incorporated in the package that I am sending to the hon. Member for Hammersmith (Mr. Soley) this week the Ealing propaganda to which my hon. Friend refers. Perhaps I will save that for next week. We could keep up the campaign on a weekly basis.

EEC (Regional Problems Index)

Mr. Morley: To ask the Secretary of State for the Environment where the south-east region is placed in the synthetic index of regional problems in the EEC.

Mr. Trippier: The synthetic index of regional problems in the European Community, attached to the Commission's third periodic report, ranks areas of England on a county basis. Counties within the south-east region of England lie between 66th and 127th position on the index.

Mr. Morley: It may come as no surprise that because the Government have engineered a north-south divide our northern regions do not favourably compare with others in the index. Will the Minister explain why the so-called prosperous south of England also does not favourably compare in the synthetic index of regional problems? For example, 16 German regions are ahead of the English south-east region, and the highest placed in the index is the Greater London region. Will the Minister explain why that is so? Is our country's economic recovery less good than the Government would have us believe?

Mr. Trippier: The hon. Gentleman will welcome, as I do, the fact that his own county ranks high in the order of priorities and will be covered. At the Department, we have strenuously supported the case for that. The index to which the hon. Gentleman referred in his substantive question will not be used after 1 January 1989. It appears that the European Commission accepts that the statistical basis is flawed. No doubt the hon. Gentleman and I can continue this discussion in correspondence or he can visit the Department. However, we maintain that the basis of the index is flawed, and we have pointed that out to the Commission.

North Sea Pollution

Mr. Paice: To ask the Secretary of State for the Environment what proportion of pollution into the North sea from rivers and estuaries comes from Great Britain.

Mrs. Virginia Bottomley: In the order of 20 per cent., according to the quality status report prepared for the second North sea conference held in November last year.

Mr. Paice: The House will be grateful to my hon. Friend for that figure. Does not her answer disprove once and for all the allegation that Britain is the dirty man of Europe? Is it not true that German rivers contribute 50 per cent. of known pollution? Will my hon. Friend tell the House what further plans there are to reduce Great Britain's proportion even below 20 per cent.?

Mrs. Bottomley: I am grateful to my hon. Friend for pointing out the clear contrast. I agree that 50 per cent. of the riverborne contaminants found in the North sea are borne from rivers at the eastern end of the North sea. Nevertheless, following on from the North sea conference in London least year, which was hosted by my right hon. Friend the Secretary of State, we are bringing forward a clear plan of action for continuing to improve the North sea. We have produced a "red list" of the 26 substances most damaging to our waterways and in addition to our participation in the scientific task force we are moving towards ending incineration and dumping at sea.

Mr. Malcolm Bruce: The Minister has made some valuable contributions in terms of the Government's concern, but will she acknowledge that 20 per cent. is no cause for complacency and that the reason why the Germans, in particular, have such a high rate of pollution is that they have a river which taps the whole continent rather than just these islands? The Government's record on the North sea will be worth defending only when specific regulations are brought before the House to ban the substances that the Minister has in mind and action is taken on them.

Mrs. Bottomley: The hon. Gentleman makes some reasonable points. At last week's meeting of the North sea scientific task force Britain was the only country in the North sea to bring forward specific programmes for monitoring, regulating and providing models of the North sea. Similarly, with the "red list", Britain is the first country to have published a list of substances that we hope to see reduced by 50 per cent. by 1995.

Mr. Bowis:: Will my hon. Friend confirm that the Thames estuary is the cleanest metropolitan estuary in the world? Will she also confirm that she will not rest on those laurels but will continue to pursue the polluters of the Thames and other rivers, particularly through the courts?

Mrs. Bottomley: The Thames is probably the cleanest metropolitan waterway in the world. About £300 million has been spent on cleaning it up and more than 100 different species are to be found there. However, there is no room for complacency and it is essential that we continue with our programmes to clean up waterways and to protect the North sea. That is why we are committed to a precautionary approach and to a rigorous approach to the implementation of these policies.

Mr. Allan Roberts: Once again, the Minister and Conservative Members have proved that they are wholly complacent about the pollution that this country puts into the North sea. Of course, river discharges into the North sea from Britain are only 20 per cent. But the river Mersey, which is the most polluted river basin in Western Europe, goes into the Irish sea, which they have not mentioned.

Three hundred million gallons of sewage are discharged every day into Britain's coastal waters. Twenty per cent. of the flow from sewage pipelines is composed of contamined industrial effluent. We dump 200,000 tonnes of liquid industrial contaminated—

Mr. Speaker: Order. The North sea, please.

Mr. Roberts: It is the North sea. Two hundred thousand tonnes go into the North sea. Will the Minister confirm that Britain is the only country dumping massive amounts of sewage sludge into the North sea? Thirty per cent. of Britain's contaminated, poisonous sewage sludge is dumped into the North sea. When will the Government stop that? The Minister will go down in history as one of Britain's great poisoners.

Mrs. Bottomley: I fear that that was an example of air pollution. As a party, we believe in action not words and we believe in action based on sound, scientific evidence. The hon. Gentleman mentioned sewage sludge. It is important to point out that sewage sludge is what remains after the treatment of sewage. One has to find the best practical environmental option. Perhaps the hon. Gentleman would prefer to have the sewage sludge spread over the land around his constituency. Our view, is that, where it is the best practical environmental option, it is permissible to dump it, so long as it is strictly licensed and strictly monitored.

Mr. Cran: Does my hon. Friend agree that the Government's commitment to cleaning up the five great estuaries in the North sea is evidenced by the fact that by 1990 £600 million will have been committed in capital works by various water authorities? Does she further agree that in the river Humber oxygen concentration has increased in the past few years from under 45 per cent. to more than 65 per cent.? Does she also agree that the situation will improve because £70 million has been committed by the water authority there to further improvements? Is that not progress and, if not, what is?

Mrs. Bottomley: I most appreciate the fact that my hon. Friend is so well informed on this matter and about the very good progress that we have made, which means that 90 per cent. of our rivers and waterways are of good or fair quality, as compared with a European average of 75 per cent. We have further to go and we are committed to do all that we can to ensure that we maintain the standards of our rivers and waterways.

Thames Water Authority

Mr. Corbyn: To ask the Secretary of State for the Environment when he last met the chairman of the Thames water authority; and what matters were discussed.

The Minister for Water and Planning (Mr. Michael Howard): I met the chairman of Thames and other water authority chairmen on Monday 5 December. We discussed the excellent progress that the water authorities are making towards privatisation.

Mr. Corbyn: Will the Minister arrange to meet the chairman of the Thames water authority again to discuss with him the authority's considerable land holdings? Will he ask the chairman to investigate why a number of completions of land sales that were imminent were withdrawn by the authority and the land subsequently sold


to Wimpey and other developers? Will he also consider whether it is right for a public undertaking such as Thames water authority to be involved in exclusive private discussions with individual developers to whom it then decides to sell a particular piece of land? Does not the Minister think that we need a public statement on all the land holdings of the Thames water authority, their valuation and the method of their disposal?

Mr. Howard: In common with all other public bodies, the water authorities are required to obtain the best market price for any land holdings of which they dispose. If the hon. Gentleman has any information to suggest that the best market price has not been obtained, I should be grateful if he would draw it to my attention. All assets, including land holdings, will be fully valued in the prospectuses of the companies when they are offered for sale.

Mr. Hayes: When my hon. and learned Friend met the chairman of Thames water authority, did he congratulate him on improving customer services and reducing debt and operating costs?

Mr. Howard: Not, I confess, on 5 December, but I have done so on previous occasions.

Mrs. Ann Taylor: Will the Minister acknowledge, as his advisers Professor Littlechild and Mr. Kinnersley have acknowledged, that it will be developers who will be most interested in buying into the privatised water industry and that, because they will control the water and sewerage infrastructure, the planning process is bound to be weakened?

Mr. Howard: I do not accept that for one moment. The planning process will continue to apply in its full rigour to land disposed of by the authorities.

Sir Anthony Grant: Rather than waste too much time discussing all this rubbish with the Thames water authority, will my hon. and learned Friend find a little time to discuss with the Anglian water authority, where he will find the greatest possible enthusiasm—

Mr. Speaker: Order. I am sure that it is true of lots of authorities, but the question is about Thames water authority.

Mr. Howard: I shall certainly do that, and I am sure that my hon. Friend's assessment is absolutely accurate.

Housing and Local Government Bill

Ms. Primarolo: To ask the Secretary of State for the Environment when he expects to publish the Housing and Local Government Bill.

Mr. Gummer: Early in the new year.

Ms. Primarolo: In drafting the new Bill, will the Minister take the opportunity to ensure that the voting procedure for the transfer of council houses in the Housing Act 1988 is amended to ensure that the dead do not count in the vote? In the vote in Torbay a woman who had been dead for two years but whose name was still on the electoral register was counted as being in favour of the transfer of the council property. Will the Minister also take

the opportunity today to inform us that, because of such irregularities, the transfer of the Torbay housing stock will not be allowed to go ahead?

Mr. Gummer: My hon. Friend the Parliamentary Under-Secretary of State referred to the decision on the transfer, and that decision will he made known. As regards the hon. Lady's second request, I shall make no such proposals.

Mr. McLoughlin: In considering the conduct of local authorities, which we expect to be included in the Housing and Local Government Bill, will my right hon. Friend seek to ensure that in appointing people to statutory planning boards, such as the national park boards, district or county councils should pick people who live in the area? Is my right hon. Friend aware that people who are subject to the planning controls of the Peak national park are fed up with the appointment of people from the city of Derby, who have no contact whatever with the national parks? Might not one way round that be to include a clause providing that at least 50 per cent. of those appointed to a planning board must live in the area?

Mr. Gummer: I know that that problem arises. I have not yet considered the matter, but now that the hon. Gentleman has brought it to my attention I shall certainly do so in view of the Bill.

Mr. O'Brien: Before the Government publish the Housing and Local Government Bill, will the Minister ensure that information about the proposed housing subsidies will be published so that local authorities can make their calculations? Without the details it is difficult for them to assess how the arrangements will work, particularly in relation to rent levels.
Will the Minister also tell us what is the future of urban development, which appears to have fallen off the Government's agenda? Will we have information on that as well before the Bill is published?

Mr. Gummer: I think that in the second part of his question the hon. Gentleman was referring to the economic development powers, as they are what is discussed in the Bill. It will certainly be on the agenda, and I shall ensure that the hon. Gentleman is able to obtain all the necessary information when the Bill is published.
I very much hope that we shall have as much information as possible about housing subsidies, but the purpose of the Bill is for us to discuss a number of important principles—which I am sure that the hon. Gentleman, too, will be able to discuss—and to apply to them particular figures at different times. I do not think the hon. Gentleman need worry about not having the information that he needs when we discuss this important Bill, which will come before us very soon.

Statutory Local Plans

Mr. Chapman: To ask the Secretary of State for the Environment if he will make a statement on progress by local planning authorities in drawing up, entering into public consultation and implementing statutory local plans (a) generally and (b) in the outer London boroughs.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): In terms of


population, about 65 per cent. of London and about 20 per cent of the rest of England are covered by adopted local plans, with a further 10 to 15 per cent covered by draft plans. Thirteen of the 19 outer London boroughs have complete coverage of adopted or deposited local plans. I hope that the planning policy guidance note published on 30 November will accelerate the preparation and adoption of local plans elsewhere.

Mr. Chapman: I thank my hon. Friend for his detailed reply. I accept that the borough of Barnet has published its draft local plan and is now conducting the statutory six months of public consultation, but can my hon. Friend give an assurance that local planning authorities can turn down planning applications that they deem out of scale and character with neighbouring buildings?
More important, can my hon. Friend assure us that if there are appeals on such planning applications, while the Secretary of State must, of course, look at each appeal individually, there will be some recognition that he will uphold planning authorities that turn down applications because they are out of scale and character?

Mr. Chope: I am happy to give my hon. Friend the assurances that he seeks. Those matters are set out in detail in paragraph 22 of the planning policy guidance note.

Mr. Cousins: Will the Minister take up urgently with his colleagues at the Department of Transport key issues such as the motorway proposals now overshadowing much of outer west London? Adequate performance of the fine-grain detail of planning in statutory local plans is being completely overshadowed by major proposals for capital infrastructure investment affecting the lives of entire communities.

Mr. Chope: Obviously some matters—the hon. Gentleman has referred to them—must be dealt with by means of a national or regional strategy, but many others must be dealt with locally. There is considerable demand from local residents that their own local councils resolve such matters.

Mr. Jessel: On local plans for outer London, will my hon. Friend take careful note that it is against the wishes of the public that their leafy roads in outer London should gradually be turned into blocks of six, eight and 12 flats? Will such public feeling be reflected in decisions on planning appeals?

Mr. Chope: My hon. Friend has made a valid point. It is one of the reasons why the new planning policy guidance note contains express reference to allowing local authorities to include in their local plans references to policies on densities for new housing.

Leicester (Housing Waiting List)

Mr. Vaz: To ask the Secretary of State for the Environment when he next plans to visit Leicester to discuss with the local council the housing waiting list.

Mr. Trippier: My right hon. Friend has no plans to visit Leicester. However, I was there on 6 December and I discussed a number of housing topics with the council.

Mr. Vaz: As the Minister was in Leicester so recently, he will know that there are currently 10,500 people on the housing waiting list in Leicester and that last year the city

council did not build a single new council house. That contrasts with the position 10 years ago when it used to build an average of 1,000 new houses a year. Does the Minister realise that the appalling statistics are a direct result of the Government's miserable housing policies? When will the Minister return to the people of Leicester the £15,274,000·18 stolen by the Government from the council's housing allocation grant? Will the Minister confirm that if the money was given to the city council—it is its rightful property—it would considerably ease the housing crisis in Leicester?

Mr. Trippier: The hon. Gentleman's point was not specifically touched on by the Labour councillors I met on my official visit. Perhaps I told them rather too quickly that the amount of money they had received in capital receipts had ensured that there was a gradual increase in the total spend in the public sector housing market. Perhaps that is why the matter was not raised. I am glad to have the opportunity to remind the hon. Gentleman of that fact. I also made the point that, wherever possible, the Department had given additional resources over and above the council's allocation at the beginning of the year. That is especially appropriate for estate action. I was asking the council to spend a darn sight more money from its resources, together with ours, to deliver new building through housing assocations, which, as the hon. Gentleman knows, form the thrust of the Government's new housing policy.

Mr. Ashby: Does my hon. Friend agree that waiting lists are often fiction, based on expectations rather than need? Does he agree that the hon. Member for Leicester, East (Mr. Vaz) would do better trying to persuade Leicester council to use its resources more efficiently rather than indulge in political posturing?

Mr. Trippier: I agree with my hon. Friend. The local authority in Leicester could do more in turning round its empty properties on various estates. It acknowledged that it has taken far too long in the past, and that process has speeded up. I am glad to see that, but there is still considerable room for improvement.

Unleaded Petrol

Mr. Gill: To ask the Secretary of State for the Environment what further measures he is proposing to ensure that unleaded petrol is made more widely available.

Mrs. Virginia Bottomley: The number of petrol stations selling unleaded petrol is increasing rapidly. By the end of the year, it is expected that one in four refuellings will take place at a petrol station at which unleaded petrol is available. Further measures to promote the availability and use of unleaded petrol are co-ordinated by the unleaded petrol group, which I chair.

Mr. Gill: I thank my hon. Friend for her reply. May I exhort her not to spare any effort to encourage petroleum companies to make unleaded petrol available as widely as possible? That holds out the greatest scope for individual citizens to make worthwhile and valuable contributions to solving the problem of pollution. Does she agree that the role and responsibility of individual citizens in the battle against pollution cannot be underestimated?

Mrs. Bottomley: I agree with my hon. Friend. In his area, taking Shropshire, Hereford and Worcester together, the number of petrol stations selling unleaded petrol has risen from four to 43 in the past year. What matters is that individual citizens should realise that lack of availability and financial disadvantage are no longer excuses. Two thirds of cars can use unleaded petrol, possibly with a small alteration, and it is up to citizens to take steps to help the environment and their wallet.

Mr. Eastham: Is it not a fact that a Government Department has been monitoring lead pollution near motorways and busy roads in built-up areas? Is it not also a fact that there is great concern about damage to children? When will the Department publish figures showing the level of lead pollution, which would heighten awareness and encourage people to buy unleaded petrol?

Mrs. Bottomley: The amount of lead in the air has dropped by half since the maximum amount of lead in petrol was reduced by two thirds in 1985. Although the amount has been reduced, we need to tackle the remaining 80 per cent. of lead in the air that comes from petrol. It is essential for people to realise the damage that lead can cause to children. We are making every effort to spell that out. The information is readily available and the amount of lead in the air is monitored by a number of sources.

Miss Emma Nicholson: I congratulate the Minister on her splendid efforts to encourage companies as well as individuals to alter cars and company vehicles to run on unleaded petrol. I am delighted that this week my hon. Friend has written to all the major companies encouraging them to make that alteration. Will she confirm that the tax differential between leaded and unleaded petrol is among the highest in the European Community?

Mrs. Bottomley: I thank my hon. Friend for her kind remarks. I have written to the top 100 companies asking what steps they can take to change their fleets. Our differential is the second highest in the European Community. However, it is important for people to realise that there is already a 6p advantage over four-star petrol. Together with the Department of Trade and Industry we intend to alter the Petrol Marking Order so that the motorist is made immediately aware—because it will be highlighted at the roadside—of the saving he can make if he buys unleaded petrol and of the help that that will provide for the environment.

Ms. Walley: The use of unleaded fuel is most important if we are to have a healthy environment. It is much too important to leave to market forces. If the Government's boasted uptake of 15 per cent. in all petrol stations is to be achieved by the end of the year, it will still compare unfavourably with the uptake in most other European countries. In West Germany it is 75 per cent. When do the Government intend to make as much money available to deal with this problem as they have made available, through the Department of Health, to overcome the problems that have arisen in the egg market? The Government ought to provide funds immediately for a Government-sponsored national information programme so that citizens are encouraged to buy unleaded petrol.

Mrs. Bottomley: The uptake of unleaded petrol has increased tenfold in the last year. If we can achieve the same tenfold increase next year, we shall have made good

progress. It is essential to work with the petrol industry, the motor manufacturers, the consumers and the motoring organisations and encourage them to spell out in detail the advantages of changing to unleaded petrol. There is already a substantial financial advantage, but it is important that each person should realise what the advantages are. That is why, through the Campaign for Lead Free Air, with which we have worked for many years and have helped to fund, we are determined to ensure that every step is taken to promote the important action that each individual can take.

Mr. Mans: Does my hon. Friend agree that, far from increasing the differential, the best way forward is to encourage more car manufacturers to tune cars to run on unleaded petrol, particularly car manufacturers in countries such as Italy and France that refuse to do so because their attitude towards unleaded fuel is way behind ours?

Mrs. Bottomley: I congratulate my hon. Friend on the important contribution he has made to this subject and the steps that I know he has taken to encourage motor manufacturers to take action in this important area. By 1990, all cars will have to be able to take unleaded petrol; we shall all be using it. I have also discussed with manufacturers whether they have been able clearly to identify those cars that are able to take unleaded fuel. Four out of five new cars are able to take unleaded fuel, and 2 million people are driving cars that could run on unleaded fuel. We want to encourage them to take that step.

Smith Houses

Mr. Janner: To ask the Secretary of State for the Environment whether he will make a statement concerning the availability of further funds for the repurchase of Smith houses by Leicester city council.

Mr. Trippier: Leicester city council received additional housing investment programme allocations of £584,000 in 1987–88 and £235,000 in 1988–89, specifically to help it meet its housing defects obligations. For 1989–90 we have set aside £15 million nationally for housing defects, for which individual authorities will be able to make bids. These will, of course, be considered on their merits.

Mr. Janner: Is the Minister aware that these amounts are totally inadequate? Leicester city council is fulfilling its obligations to protect people who bought their council houses in accordance with Government policy, but the Government are doing precious little to help them. Those who live in the remaining Smith houses in my constituency will share a wretched Christmas along with the thousands of families who cannot get council houses because the Government have taken money away from Leicester city council, which means that it cannot do its job in other respects.

Mr. Trippier: The hon. and learned Gentleman is being uncharacteristically unfair, and I think that he may have prepared his supplementary question before hearing my answer to his substantive question. Only last month the Department of the Environment gave Leicester city council additional funds to meet the problem of housing defects that the hon. and learned Gentleman has outlined.

Mr. Janner: It is not enough.

Mr. Trippier: It never is for the hon. and learned Gentleman. He will continue to say that it is not enough. All I can say is that there was a redistribution of resources in his region and we responded positively to the case put to us by Leicester city council. The additional HIP allocation, with the council's normal resources, means that the council will be able to help owners who are still awaiting assistance.

Dorset (Planning)

Mr. Adley: To ask the Secretary of State for the Environment when he next plans to visit Dorset to discuss public opinion on planning matters.

Mr. Chope: Neither I nor my right hon. Friend have any plans to do so.

Mr. Adley: That is a pity. Will my hon. Friend please accept from me that overdevelopment in Dorset is now the overriding concern of many of my constituents and those of my neighbours? Is he aware that there is widespread disillusionment and even a feeling of helplessness at what seems to be an alliance between certain developers, land owners and even certain county councils who favour the seemingly inexorable creep of development? Will he accept, on behalf of our right hon. Friend the Secretary of State for the Environment, my constituents' thanks for the decision to throw out the Carroll group proposals? Will he reconfirm the answer given to me by his fellow Under-Secretary of State on 20 July that it is definitely not the Government's policy to encourage the development of new towns on existing green belt land?

Mr. Chope: I am very happy to confirm the last point and I am grateful for my hon. Friend's comments about the Carroll decision. My right hon. Friend the Secretary of State upheld green belt policy by overturning a recommendation from the inspector. He was challenged in the High Court but won the case.

Mr. Nicholas Baker: Will my hon. Friend do everything that he can to protect the green belt in Dorset and elsewhere in the south of England? When any changes are made to structure plans, will my hon. Friend ensure that control of local planning authorities over planning matters is in no way diminished?

Mr. Chope: Yes, certainly. Indeed, we want to go further than that. We want to encourage more local planning authorities to draw up their local plans and thereby to have greater control over their own environment.

Clay Pigeon Shooting

Mr. Bellingham: To ask the Secretary of State for the Environment when he proposes to issue a consultation paper on the permitted days for clay pigeon shooting under the General Development Order 1988.

Mr. Howard: Before Christmas.

Mr. Bellingham: Is my hon. and learned Friend aware that, if the order goes through, hundreds of small clay pigeon clubs will go out of business? If he further aware that they were not consulted and are outraged? Surely this is no way in which to treat a responsible and law-abiding sector of the community. The Government are trying to

encourage alternative land uses, so surely it makes no sense to push this policy through in contradiction of that aim.

Mr. Howard: I am fully aware of the points that my hon. Friend makes and they will be given full weight in the consultation process to which his original question referred.

Sir Hector Monro: Does my hon. and learned Friend accept that, if consultations are to go through quickly, he must try to bring in an amending order by, say, 1 March? If he does not, clay pigeon shooting clubs cannot plan their season and many individuals will not be able to use clay pigeon traps to practise in fields. Is he aware that there is a voluntary code of practice, which is approved by his Department, to reduce noise and any form of local inconvenience? He must act very speedily indeed.

Mr. Howard: I am aware of the code of practice to which my hon. Friend refers. We shall do what we can to reach a speedy conclusion of this matter.

Bathing Water

Mr. Fearn: To ask the Secretary of State for the Environment what action he is taking to ensure that all beaches meet the standards set by the European Community bathing water directive.

Mr. Howard: Some 60 per cent. of our bathing waters now meet the mandatory EC standards. Spending programmes for improving the remaining waters are running at £70 million a year, and we are considering the implication of accelerating these programmes to achieve general compliance by 1995.

Mr. Fearn: As one third of bathing waters still do not comply with the EEC directive, what action is the Minister taking about raw sewage which is being pumped into seas and which affects tourism, fishing and local people?

Mr. Howard: I thought that I had answered that question. We are considering ways of accelerating the programme to achieve general compliance with European Community standards by 1995.

Mr. Oppenheim: Is it not true that all the pollution has occurred while the water authorities have been in the public sector? Will not any price rises in water after privatisation be largely because of the need to clean up that pollution?

Mr. Howard: My hon. Friend is quite right. The Select Committee reported that the problems which we now face are largely due to the cuts in investment by water authorities between the mid-1970s and the early-1980s when the Labour party was in power.

Nirex

Mrs. Margaret Ewing: To ask the Secretary of State for the Environment when he next expects to meet the chairman of United Kingdom Nirex; and what matter will be discussed.

Mrs. Virginia Bottomley: My right hon. Friend has no plans at present to meet the chairman of Nirex.

Mrs. Ewing: In the light of that reply, will the Under-Secretary tell us when she expects Nirex to announce the sites that have been selected and the exact method of disposal of the waste? What is her Department doing to ensure that there will be a full debate in the House to enable all hon. Members to express their views on the selected sites and the proposals by Nirex?

Mrs. Bottomley: We understand that Nirex hopes to bring forward its proposals based on the results of its consultation exercise and technical and geological studies early next year. The Government will then make a final decision after a full public debate.

Mr. Ian Bruce: Does my hon. Friend agree that we should accelerate the Nirex programme? She will be well aware that for decades we have been storing the waste that Nirex wishes to over-engineer in its disposal and storage, in nuclear power stations throughout the country. We have to get across to the general public the message that there are many places—

Ms. Short: Does the hon. Gentleman want it in his constituency?

Mr. Bruce: I have it in my constituency. There are many places where it can be safely stored. Unless we bite the bullet we shall never keep nuclear energy progressing as it ought to be for the good of the environment.

Mrs. Bottomley: I appreciate my hon. Friend's point of view. He is absolutely right, but uncertainty can cause greater difficulty and problems. The Government are satisfied that safe disposal facilities can be developed, but any facility would have to meet the stringent safety requirements of the authorising and regulatory bodies. I know that my hon. Friend would not want to accelerate those procedures.

Dr. Cunningham: In addition to the commitment to a necessary debate in the House, will the Minister confirm that if there are any proposals for new methods of monitored storage of nuclear waste, there will be a wide-ranging public inquiry before any decisions are taken?

Mrs. Bottomley: My right hon. Friend has given a commitment that when Nirex comes forward with its proposals there will be a public inquiry and widespread public debate. It has been agreed by the Environment Select Committee and the House of Lords European Communities Select Committee that on-site storage is unacceptable because of the higher risk, that disposal is the right approach and it is time that the Government proceeded to deal with the problem.

Mr. Bill Walker: When my right hon. Friend meets the chairman of Nirex, will he bring to his attention the fact that the Scottish National party in Scotland has been distributing leaflets which give completely misleading information or lies about the proposals that may or may not be made, and that has been causing much unnecessary concern?

Mrs. Bottomley: Nirex has made efforts to consult very widely and put forward responsible and reasonable information. I shall certainly draw my hon. Friend's point to my right hon. Friend's attention.

Association of District Councils (Report)

Mr. Archer: To ask the Secretary of State for the Environment whether he will make a statement on the report of the Association of District Councils called, "Social Rented Housing: Supply and Need", issued in September, a copy of which has been sent to him.

Mr. Trippier: This is an interesting report which we have read carefully.

Mr. Archer: In view of the revelation that there are now 1·3 million families on council waiting lists, is the Minister at last persuaded of the need for increased provision in the public sector, as urged in the report, or will he emulate the Prime Minister's reaction and dismiss the Association of District Councils as one more institution which has become infected by Socialism?

Mr. Trippier: I am convinced of the need to provide houses at affordable rents, and the Housing Act 1988 is designed to meet that need. This will happen through extension and expansion of the housing association movement. That is precisely why we have been fortunate in securing substantial resources from the Treasury to expand that policy and give a great increase to the Housing Corporation, which eventually will find its way to the housing associations.

Environmental Protection

Mr. Stern: To ask the Secretary of State for the Environment if he will list the major areas of opportunity for protection of the national environment which he expects his Department to pursue over the next 12 months.

Mrs. Bottomley: We will be taking action both nationally and internationally to protect all aspects of the environment. We are moving forward our policies to revise and refine our waste disposal legislation, to establish an integrated pollution control system, to tacke air pollution by cleaning up power station emissions and promoting lead-free petrol, to invest in research into greenhouse gases and to take a lead on protecting the ozone layer.

Mr. Stern: On my hon. Friend's final point, would she care to comment on the efforts being made by the major companies in the chemical industry to assist the Government in that endeavour.

Mrs. Bottomley: The major chemical companies have been investing heavily in research into alternatives to damaging CFCs and halons. My right hon. Friend the Secretary of State announced that he is to host a conference here in March to encourage other countries to sign the Montreal protocol and to raise the limits so that we can look for a reduction of 85 per cent.

Patrick Ryan

Mr. John Fraser: (by private notice): To ask the Attorney-General if he will make a statement on the decision of the Irish Attorney-General in relation to the extradition of Patrick Ryan.

The Attorney-General (Sir Patrick Mayhew): In my answer to a private notice question on 1 December, I told the House that the Irish Attorney-General was still considering the warrants that the Metropolitan police had sent to Dublin—first, by facsimile on 25 November and then by hand on 26 November—and the additional documentation which I had sent to him on 25 November. I had at that time not heard from Mr. Murray about them other than the telephone conversation on Monday 28 November, the content of which I reported to the House.
At about 5.30 on the evening of 1 December, Mr. Murray transmitted to me a total of 20 questions relating to the statements of law and fact that I had sent to him on 25 November. The information requested was supplied the following day. Yesterday, 13 December, Mr. Murray announced that he had on the previous day advised the Commissioner of Garda Siochana not to endorse the warrants for execution. He also announced that, in respect of the charges in two of the warrants, he had formed the opinion that there was, on the part of the relevant prosecuting authority, a clear intention to prosecute and that such intention was founded on the existence of sufficient evidence. These are the requirements specified in the Irish Extradition (Amendment) Act 1987.
In relation to the charges in the other two warrants, Mr. Murray had not found it necessary to reach any final conclusion, because he had concluded that, were Patrick Ryan to be extradited to Britain, it would not be possible for a jury to approach the issue of his guilt or innocence free from bias. This was by reason of what he described as the extreme nature and extent of the prejudicial material published. Additionally, he said:
the charges which have been brought against Patrick Ryan are of a most serious kind and they should be investigated by a court. The Criminal Law (Jurisdiction) Act 1976 provides a means whereby certain serious offences committed outside this jurisdiction may be tried here. Such a trial may, under Irish law, take place before a court of three judges without a jury. Heavy penalties are prescribed by Irish law for those offences.
Mr. Murray had informed me personally of his decision a few hours earlier.
For my part, I find this outcome extremely disappointing and the reason given for it regrettably offensive. The reason is also singularly surprising, as speculation about the fairness of any resulting trial by a jury in England is not one of the functions which the Irish Attorney-General is directed by this very recent Act to undertake. I readily acknowledge that the question is one for Irish and not English law, but I also note the doubts in this regard expressed today in leading articles in The Irish Times and Irish Independent.
At all events, yesterday morning, I informed Mr. Murray that I rejected his thesis that Patrick Ryan would be denied a fair trial. Juries in England are invariably instructed that they must decide the case only on the evidence that they have heard and seen in the trial. In every appropriate case—that is to say, cases of any notoriety—they are directed to disregard whatever they may have

heard or seen elsewhere. In my experience, juries heed those directions scrupulously, with the fairness that one expects in the ordinary men and women of our country. Whatever may have been published anywhere—and before yesterday, Mr. Murray had at no time raised with me any anxiety about any publication—I am entirely confident that, if and when Patrick Ryan were to come to trial in England, there would be no significant risk that such publicity would affect a jury's ability or will to try him fairly.
As to the possible trial of Patrick Ryan in the Republic of Ireland, as my right hon. Friend the Prime Minister said yesterday, we do not absolutely exclude that, but only two of the four charges seem to be covered by the Criminal Law (Jurisdiction) Act. Additionally, there would be grave anxieties over the security of witnesses whom we could not compel to go to the Republic and, if the case accordingly failed for insufficiency of evidence, we could not subsequently try Patrick Ryan in our own jurisdiction.
These are major disadvantages inherent in an option that we had every right not to prefer to that of extradition.

Mr. Fraser: It is a pity that some of the words used by the Attorney-General were not fortunate and have not helped the matter any further. Is it not one of the lessons of the affair that we could do without public, intemperate and hectoring manners, particularly those of the Prime Minister? Is it not much better for pre-trial processes not to be conducted under arc lights but dealt with as they would be in this country, quitely and without publicity?
Does the Attorney-General agree that matters have not been helped by the unexpected passing of the issue to the Irish Government by the Belgian Government? Does he further agree that the affair has not been helped either by trial by newspaper which has been fed by outbursts by the Prime Minister and by a grave error of language by the hon. Member for Hampshire, East (Mr. Mates), who used words which were adopted by the Prime Minister—I understand that he withdrew those words the following day, but the damage had been done by then—or by a press briefing by the Crown Prosecution Service? All this raises the problem of prejudice to a jury. Will the Attorney-General confirm that he has been advised by the Irish Attorney-General of his concern about the problem of prejudice to a jury as a result of these matters being canvassed in public and in rather strong language before any action has been taken?
Opposition Members certainly want to see a proper judicial investigation of alleged terrorist offences, and that depends on the co-operation and good sense of the Government. Will the Attorney-General now calmly and, if necessary, privately confer with Mr. Murray with a view to a trial in Ireland of the issues, as the Irish Attorney-General has decided that two prima facie cases should be investigated by the Irish courts?
In other recent notorious cases, the Government have not been afraid to use thejurisdiction of overseas courts. Surely the right thing to do now is to adopt the jurisdiction of the Irish courts and to have the matter brought to trial as speedily as possible.

The Attorney-General: I am sorry that the hon. Member for Norwood (Mr. Fraser) finds anything intemperate or otherwise unsatisfactory in the language that I used to respond to his question, but I do not think that he can apply that sobriquet to the word "offensive" in


the context in which I applied it. The reason why I suggest that is the reason that led the right hon. Member for Plymouth, Devonport (Dr. Owen) to make his intervention yesterday.
I agree with the hon. Gentleman that pre-trial issues are not helped when they are dealt with under arc lights. That is the principal reason why the British Government objected to the Irish Extradition (Amendment) Act 1987, which confers that jurisdiction upon the Irish Attorney-General and obliges him to come to conclusions on matters of English law. Inevitably, controversy is inherent in that procedure. I agree with what the hon. Member for Norwood said about the Belgian Government's contribution to the affair. I think that the British Government's opinion about that has already been made clear.
I reject the assertion of the hon. Member for Norwood that anything that my right hon. Friend the Prime Minister said would cause any prejudice to proceedings. She was entirely entitled to say what she did, no doubt expressing it with feelings that are widely shared throughout the country.
The hon. Member for Norwood referred rightly to the generous as well as immediate retraction that my hon. Friend the Member for Hampshire, East (Mr. Mates) made the next day. He made clear the context in which he used the words which he retracted. We all have an obligation to be careful in the House, and I believe that it is met.
It is plain from what the Attorney-General for Ireland said in his statement, and in a letter that he was good enough to send to me just beforehand, that he believes that prejudice has been incurred by matters that have been published. I have made it clear in what I have said in answer to the hon. Member for Norwood that I am confident that, if and when Patrick Ryan were to come to trial in this country, there would be no significant risk at all that any publication of any material would have any detrimental effect upon the ability or the will of a jury to give him a fair trial. That is required in this country and it is received. I agree that good sense is needed to try to get sensible extradition arrangements established, as they were under the reciprocal legislation of 1965 between our two countries.
The hon. Member for Norwood asked about the Criminal Law (Jurisdiction) Act 1976. I repeat that I have no objection to using that Act in a proper case. A fortnight or three weeks ago, I asked the Irish Attorney-General to prosecute under that Act in a case called Sloane. As I hope I made clear, there are serious difficulties in this case. I shall come to a conclusion upon them as soon as consultations with the Metropolitan police and others are completed.

Mr. Ivan Lawrence: When our anger has died down at the insult to the British system and at the absurdity of the suggestion that British juries, among which are often many Irish citizens, are incapable of coming to a fair decision when reaching a verdict, will we not be left with two questions: first, how determined are the Southern Irish Government to root out terrorism; secondly, how will this absurd gesture improve the prospects for the Anglo-Irish Agreement?

The Attorney-General: My right hon. Friend the Prime Minister has made it clear that we wish the Anglo-Irish

Agreement to continue, and that it will continue. I note and share the opinions which my hon. and learned Friend has expressed about the reflections upon British juries in this case which are contained in the Irish Attorney-General's statement. It is right to say that, apart from English citizens, Irish citizens who are resident in this country frequently serve upon our juries.
I prefer to take at their face value the expressions of intent by the Irish Government, including the Irish Attorney-General, that it is their desire to take effective steps against terrorism. I must observe, however, that yesterday's decision is an obstacle rather than anything that facilitates a firm attack upon the terrorism that concerns us all.

Mr. Merlyn Rees: Is it not the case that, as a result of a tragedy of errors on both sides of the Irish sea, reinforcing their attitudes about our justice and ours about the Irish system which have continued for about 500 years, a man against whom there are serious charges, as agreed by the Irish Attorney-General, is allowed to go free? Would it not be better now to stop posturing on both sides and use the Criminal Law (Jurisdiction) Act, which I piloted through the House with the agreement of both sides and which is now on the statute book, to give the Irish the chance to bring the man to trial? The Attorney-General should discuss the problem of witnesses and their safety in Dublin and give them a chance to bring the man to trial. We may get hot under the collar, but there are those on both sides of the border, and especially in the North, who have suffered from violence over 20 years. They are not amused by our attitude. They want something done about men of violence, and the appropriate legislation is there to use.

The Attorney-General: I have yet to find anyone who finds anything in this connection amusing. It is certainly very exercising and it causes great anxiety. I agree that it would be a tragedy if anyone who was sought to be charged with, in the words of the Irish Attorney-General, very serious offences were not brought to trial. However, it is not quite as simple as that. Obviously I must consider the security of witnesses. That is very important. I have made it clear that I see great advantage in using the Extradition (Amendment) Act 1987 in a proper case. Those matters must be considered carefully.
One consideration which might occur to all hon. Members is what might be said and how we would feel if, however tragically, a witness who was sent down there suffered serious injury or death in circumstances where we were left only with that option instead of extradition which we considered ourselves entitled to ask for. Those matters must be considered in a sensible and unbiased way, and that is the approach that I intend to adopt.

Mr. James Kilfedder: Will the Attorney-General refuse to accept the lesser option of a trial in the Irish Republic in this case because in the circumstances it would be regarded as acceptance of what the Attorney-General described as the offensive allegation that Patrick Ryan would not receive a fair trial in this country? Would it not be much better therefore to wait until he should come here for his perhaps terrorist activities and then he could be arrested and charged?

The Attorney-General: The hon. Gentleman is aware that we are referring to someone who is suspected of those


activities and whom it is sought to charge. I understand what lies behind the hon. Gentleman's question, but I do not think that it would be right to say that, simply because we have been denied extradition, we will give up any attempt to prosecute this man—having him prosecuted in Ireland. I do not think that that would meet the criterion of good sense that has been urged upon me. However, other matters must be considered and I hope that I have made them clear. For example, if at a trial in Dublin through any insufficiency of evidence this man was acquitted where otherwise he would have been convicted, we should be prevented from trying him here if ever he appeared in this jurisdiction.

Mr. Robert Maclennan: Does the Attorney-General recognise that many of the people who will not accept the Irish Attorney-General's view that a fair trial is not possible in this country none the less regard the participation by Members of Parliament and the Prime Minister in a hue and cry while the Attorney-General was considering these matters as, to put it no higher, extremely unhelpful? They also recognise that, if he were making judgments of this kind in a similar situation, he would resent political utterances about a judicial matter. Will he therefore treat this matter in the way in which the Irish Attorney-General said it ought to be regarded—as unique and not something which is to be the foundation of our relations on extradition matters in future?

The Attorney-General: I very much hope that this case will be unique in certain important respects. Plainly it will not be allowed to affect relations between our two countries. That would be absurd. I reject any assertion that my right hon. Friend the Prime Minister took part in or led a hue and cry. Faced with some of the barracking to which she is so frequently exposed, perhaps she has to raise her voice and doubtless she expressed her views with feeling. However, in that regard I do not believe that she is to be criticised.

Mr. Alistair Burt: Does my right hon. and learned Friend agree that, whether or not Patrick Ryan is guilty of any offence, his reported statements make it clear that he cares little for this country or its well-being? Is it not essential that we prevent what would be his greatest victory—to drive such a wedge between London and Dublin that effective dialogue would stop? Without proper dialogue, there would be no opportunity to repair the misunderstanding and, above all, no opportunity for future extraditions.

The Attorney-General: The whole House shares my hon. Friend's constructive approach to this matter.

Mr. Eric S. Heffer: Does the Attorney-General agree that, by publishing the full statement by the Irish Attorney-General, The Daily Telegraph did a great service to the people of this country who had an opportunity to study the statement, which I believe to be both moderate and interesting?
Does the right hon. and learned Gentleman further agree that we must not assume that someone is guilty until he has been found guilty? Already today in the House the gentleman in question has been called a terrorist, yet the matter has not yet been brought before a court. On that

basis, is not the Irish Attorney-General correct to ask how anyone of Irish origin can expect a fair trial in this country without first having the opportunity to come here and not be accused by the press and hon. Members of being a terrorist when there is no proof of that?

The Attorney-General: The hon. Gentleman is right to say that it is fundamental to our system of law that everybody is presumed to be innocent until he is found guilty. Every jury is instructed in that fundamental principle. The sad aspect of the Irish Attorney-General's statement is his supposition that a jury in the case of Patrick Ryan would not abide by that fundamental principle. That is why I found the statement offensive. It is a matter of extreme importance, and it is not in the faintest degree justifiable to say that no Irish person can come to this country and receive a fair trial.

Mr. Ivor Stanbrook: Does my right hon. and learned Friend derive any wry satisfaction from knowing that in at least two cases the warrants were found to be impeccable, contrary to what was alleged by Opposition Members at the time? Does he think that the Irish Attorney-General acted properly within his own law in deciding the matter on grounds other than those laid down in the relevant law of the Republic?

The Attorney-General: I must correct my hon. Friend on one small matter: not two but all four of the warrants were without criticism. On the separate ground of whether there was sufficient evidence to warrant a prosecution, the Irish Attorney-General found that there was. He found it unnecessary to reach a conclusion on the other two cases because, in his view, on no charge could Patrick Ryan expect a fair trial. I have forgotten my hon. Friend's second point, so perhaps he would repeat it.

Mr. Stanbrook: I asked about the grounds on which the Irish Attorney-General refused our application.

The Attorney-General: I am grateful to my hon. Friend I have already said that I found it surprising that the Irish Attorney-General had denied the application on the ground of fair trial. Although the Extradition (Amendment) Act 1987 is a recent piece of legislation, it does not set out a ground that the Irish Attorney-General should be satisfied that there is a likelihood of a fair trial, but it does tell him the various matters to which he should put his mind.
That point was brought out in today's two leading articles to which I referred. The Irish Independent states:
For, in coming to his conclusion, the Attorney General has claimed as a basis something which is not in fact part of any of our laws on extradition—that extradition should not be carried out if a fair trial is in doubt. To that extent he has made an interpretation of our laws—a function which is, rightly, reserved to our courts.
It should have been a more proper procedure to have endorsed at least one of the warrants, allowed the case to go to court and provide an opportunity for an Irish judge to decide if, in fact there was justification for refusing to extradite on the grounds of prejudice in Britain.

Mr. Peter Archer: Whether he agrees or disagrees with what Mr. Murray has said, will the Attorney-General confirm that Mr. Murray was not casting doubt on the fairness of United Kingdom courts but was saying that, after the extensive coverage and comment based on official sources in London and the


Prime Minister, no jury, however fair, could approach this matter with an open mind? Are there not lessons to be learnt from that?

The Attorney-General: I am happy to confirm that the Irish Attorney expressly made it clear that he was not casting doubts on the system but was giving his mind to the likely outcome of this case. He did not refer to the Prime Minister. I am not aware of the publication of any matter that is complained of as coming from official sources. Plainly there are lessons to be learnt, but the principal lesson is that there is a strong case for reviewing the Extradition (Amendment) Act 1987 and the procedures which it sets out. We have already made representations on that and we should renew them.

Mr. Ian Gow: Since my right hon. and learned Friend has confirmed that the ground on which the Irish Attorney-General refused the request for extradition is not one of the grounds contained in the Extradition (Amendment) Act 1987, has he considered the possibility of taking action in the Irish courts for a judicial review of the decision of the Irish Attorney-General? Is he aware that the review for which he called is one which is most unlikely to take place by the Irish Government? Despite that, can he assure the House that at the meeting of the intergovernmental conference today such a request will have been made by our Secretary of State attending it? Finally—

Mr. Speaker: No.

The Attorney-General: I cannot give the assurance for which my hon. Friend just managed to ask before he was silenced. In my reply, I said that this was a matter for Irish, not English, law. I do not have any comment on my hon. Friend's initial suggestion.

Mr. Norman Buchan: Is it not nonsense to believe that it is possible for any jury to be wholly insulated either from factual or apparently factual material circulated or from an atmosphere? In that situation, is it not proper that the person named should be tried under Irish legislation? Would it not be helpful for all of us if the Prime Minister would remember that she is a Prime Minister and would speak as a Prime Minister with restraint and propriety, not as some young skinhead representative of the young Tories?

The Attorney-General: I am not aware of anything improper that the Prime Minister has said in this regard. A reason why she has been Prime Minister for nearly 10 years is that she reflects so accurately the feelings of so many British people. I have noted the suggestion that there should be some intra-European court for deciding these matters, but I reject the premise that juries cannot be expected to be impartial and unbiased whenever there happens to be some political connotation in a criminal trial. The purpose of juries is to try crime, not politics, and that is what they succeed in doing.

Mr. William Cash: Does my right hon. and learned Friend agree that this is not merely a question of English or, indeed, Irish law but to some extent may be a question of canon law? Although he may not be versed in matters of canon law, does he agree that those of us who are Catholic would personally like to see Mr. Ryan removed from his present residence and released to the appropriate authorities?

The Attorney-General: I am not sure which appropriate authority my hon. Friend has in mind, or quite how immediate that release is intended to be. As I have quite enough to contend with on my own patch, I shall leave these matters to my hon. Friend.

Mr. Stuart Bell: The Attorney-General has yet to direct his attention to the statement made by the Irish Attorney-General yesterday, in which the Irish Attorney-General said that he had called the right hon. and learned Gentleman on a previous occasion in relation to a previous warrant and had expressed his concern at the prejudicial effect of press statements. If that message were given by the Irish Attorney-General, was it taken to heart by the British Attorney-General, and did he so advise the Government before the Prime Minister came to the House with her inflammatory and prejudicial statements?

The Attorney-General: I do not propose to add to what I have already said about my right hon. Friend the Prime Minister's intervention. In the case of McVeigh in May this year, Mr. Murray telephoned me to express his anxiety about the activities of the media and in particular of a television crew outside Portlaoise gaol after McVeigh had been released in a case in which Mr. Murray had authorised the backing of the warrants. That was in marked contrast to this case. On no occasion over the 13, or however many, days that passed did Mr. Murray alert me to any anxiety that he had about any publication of any kind.

Mr. Henry Bellingham: Further to the question of my hon. Friend the Member for Eastbourne (Mr. Gow), does not the Taoiseach's claim that this matter should be decided purely on legal grounds look pretty hollow because it is obvious that the Irish Attorney-General's decision was political? If the EEC is serious about combating terrorism, is not what we need a new harmonised extradition system covering the whole of the EEC?

The Attorney-General: I believe that I have sufficiently expressed my response to the decision of the Irish Attorney-General. I do not claim that it was a political decision. It is sufficient to say that it was, in my respectful belief, a wrong decision, for the reasons that I have given. I am not persuaded, although this is not a matter for me, that there is any advantage to be had in a centralised European system, because, after all, we are looking at some individual systems of law, and we need to keep it as simple as we can.

Several Hon. Members: rose—

Mr. Speaker: Order. Important though this matter is, we are due to have a very important debate on British Shipbuilders, in which there is considerable pressure to take part.

Mr. Tam Dalyell: On a point of order, Mr. Speaker, and for the protection of the House. It was within your hearing that the Attorney-General, in answer to a question, gave as a reason for the Prime Minister—

Mr. Speaker: Order. This is a continuation of questions. I am sorry that I was not able to call the hon. Gentleman. He will have to try on another occasion.

Mr. Dalyell: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I am not hearing it. I have already said that an important debate, on British Shipbuilders, is to follow.

British Shipbuilders

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Tony Newton): I beg to move,
That this House notes with approval the progress which has been made towards returning to the private sector the shipbuilding yards and other facilities owned by British Shipbuilders; notes also that, despite every effort, it has not proved possible to establish a viable basis for continued shipbuilding at North East Shipbuilders Ltd.; and warmly welcomes the measures proposed by Her Majesty's Government to encourage new enterprise and employment opportunities on Wearside.

Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.

Mr. Newton: I think that it will be most helpful to the House if I open the debate by concentrating on the major issues at not too great a length, in view of the numbers wishing to speak, and then, with the leave of the House, respond at the end to the specific points that hon. Members will no doubt want to raise.
It is important first to say something about the wider background, which is, of course, the difficult condition of the world shipbuilding market over a long period. In particular, in the early 1970s, the worldwide effects of the huge increases in oil prices produced a sharp reduction in shipbuilding demand, at just about the same time as earlier massive investment in Japan and the developing programme of investment in South Korea were bringing about a huge increase in shipbuilding capacity.
The extent of the problem can perhaps best be illustrated by the simple fact that in 1987, even after very considerable reduction of capacity had taken place, less than 10 million compensated gross tonnes of new ships were delivered by an industry whose worldwide building capacity is something like 18 million tonnes. In other words, the industry worldwide had facilities that could build nearly twice as much shipping as anyone was willing to buy. The effects of that have, inevitably and inescapably, been felt throughout the world.
The debate will understandably focus especially on the position in Britain, where employment in merchant shipbuilding fell from 45,200 in 1977 to 11,300 in 1987, a loss of nearly 34,000 jobs. But the context in which that figure has to be viewed is one in which, in the same period, France lost 21,000 jobs out of 30,000, Germany lost more than 26,000 jobs out of 39,000, the Dutch more than 17,000 jobs out of fewer than 21,000, the Swedes more than 15,000 jobs out of fewer than 17,000, and the Norwegians nearly 14,000 jobs out of fewer than 18,000. The Japanese industry lost more than 100,000 jobs from the 1977 base of 164,000.
In the past two years, Sweden has abandoned the production of larger merchant ships, and its two major yards have been converted for other industrial uses. France has carried out a major restructuring, cutting from five significant yards down to one, with more than 5,000 job losses. Germans yards have shed some 6,000 jobs in that period. Japan has completed a major restructuring of its merchant shipbuilding industry, which involves substantial capacity cuts—since 1985, direct and sub-contract employment in Japanese yards has fallen by almost 50,000 people.


Even the Koreans are not immune from the problems presented by low demand for new ships and continuing huge over-capacity. Their single largest yard is currently employing only half the people that it was designed for.
There is no reason to suppose that the problem of overcapacity in shipbuilding is suddenly about to disappear, as had earlier been hoped. I can best illustrate that by referring to the forecasts of the Association of West European Shipbuilders, of which British Shipbuilders is, of course, a member. In 1984, in its last report on this matter until recently, it suggested an average annual building requirement of 12·7 million compensated gross tonnes between 1984 and 1990, and 18·5 million CGT between 1990 and 1995. As the House will realise from the figure I gave earlier about total world capacity in 1987, that would have meant a demand in the first half of the next decade roughly equal to the industry's capacity in 1987.
The latest AWES forecast, in a report published only three months ago, now puts average annual demand between 1990 and 1995 at only 12·5 million compensated gross tonnes, and suggests that even in the second half of the next decade, demand will not recover to the extent previously predicted for the first. Moreover, the Japanese assessment of the likely course of demand is in line with those forecasts. Whatever may be said—we have said it before and will say it again—about the uncertainties of forecasting, I think that the House will agree that there is no basis here for the view that the problem of excess capacity is about to go away, and that all that is needed is to find a way to tide things over until the good times return.
These, then, are the problems with which successive British Governments, like other Governments throughout the world. have been wrestling. The previous Labour Government nationalised the industry in 1977, in the hope and belief that this would provide a good framework within which to conduct the necessary restructuring and create a viable shipbuilding industry. It would be hard for anyone to argue that those hopes have been fulfilled, or show any real signs of being fulfilled. Since vesting day in July 1977, some £2 billion of public money has been put into British Shipbuilders in one form or another, without achieving what we would all wish to see. Indeed, that figure includes losses of £650 million just on building ships, of which only £250 million represents permitted subsidy under the agreed rules of the European Community.
The recent position of NESL itself perhaps illustrates the position most starkly. In the past five years, it has completed no contract to cost, and the total subsidy on shipbuilding contracts has averaged 50 per cent. of the building costs incurred. In the past three years, it lost £100 million through operating losses over and above intervention fund subsidy of a roughly similar amount; and in the last full year for which we have figures, it lost £56 million on a turnover of £69 million.
The present Government—I simply state this as a fact, of which the House is already aware—take the view that the better course, in the light of this experience, is to seek to return the industry to the private sector, subject, where appropriate, to the availability of subsidy within the rules agreed in the Community—the so-called sixth directive.

Mr. A. J. Beith: As the Minister has criticised so strongly the management of British Shipbuilders for the chain of losses that he has just

described, why has he relied so heavily on that management's advice about the viability of the bids now being considered for the Sunderland yards?

Mr. Newton: British Shipbuilders management, as the people who have been running the industry on the Government's behalf, are an appropriate source of advice for us to seek, without our necessarily always and unalterably accepting that advice. The very experience that British Shipbuilders management has had in the difficulties that it has experienced in recent years puts it in a position to judge the difficulties that others are likely to have when they are confronted by what are, frankly, optimistic bids.

Mr. Bob Clay: May one drew the conclusion from the answer given by the Minister to the hon. Member for Berwick-upon-Tweed (Mr. Beith) that because, according to the Government, British Shipbuilders could not make a success of the industry, it may have been induced into the position where it finds it difficult to recommend that anyone else can do so? Is not that the logical contradiction and the true position?

Mr. Newton: It is neither a contradiction nor a logical position to adopt. As I said to the hon. Member for Berwick-upon-Tweed (Mr. Beith), British Shipbuilders experience of accepting, on what has turned out to be, at times, a dramatically over-optimistic basis, contracts that have incurred substantial losses or have collapsed disastrously—as happened with the Danish ferry contract—puts it in a good position to make judgments when others come forward with what are, in my view, overoptimistic bids. I have no doubt that the hon. Member for Sunderland, North (Mr. Clay) will make a number of points to which I shall have to respond, should he be fortunate enough, as I hope he will be, to catch your eye, Mr. Speaker.
The naval shipbuilding yards were sold between 1984 and 1986. The process of selling those yards primarily concerned with merchant shipbuilding—or rather, those that were part of British Shipbuilders, since there were already a number of smaller privately owned yards—has been in train since earlier this year, following my predecessor's statement to the House on 18 April. It is that process of selling the merchant shipbuilding yards belonging to British Shipbuilders that has led to today's debate.
Taken as a whole, that process is being carried through with considerable success. As I told the House in my statements of 14 November and 7 December, at the outset British Shipbuilders owned shipyards at Govan, Sunderland, Appledore and Port Glasgow, together with the Clark Kincaid marine engine builders at Greenock and a services subsidiary, Marine Design Consultants, at Dundee and Sunderland.
The Govan yard has been successfully sold to the Norwegian company, K vaerner Industries. It is making Govan the centre for its gas-carrying ship technology, with a programme of work taking the yard well into the 1990s. Negotiations for the sale of the Appledore yard in Devon are at an advanced stage. It is set to become part of the Langham Industries group—I hope, around the turn of the year. Clark Kincaid at Greenock should similarly be sold shortly to the management buy-out team. I am particularly pleased, that Clark Kincaid will build the engines for the first two gas-carrying ships that K vaerner is building at Govan.


Negotiations with Ailsa Perth for the sale of Ferguson have got off to a good start. There is a reasonable chance that the sale will be completed by early February. The terms of all those disposals are now under consideration by the European Commission.
Finally, as the House will recall from my statement on 7 December, I have accepted British Shipbuilders recommendation that the preferred bidder for Marine Design Consultants should be the team led by its managing director. I hope that that sale will he completed early next year.
Five of the six main undertakings owned by BS have either been successfully returned to the private sector or are well on the way to being so. Those five undertakings account for nearly two of every three of the 6,500 people employed by British Shipbuilders when my predecessor made his statement on 18 April.
The exception, which will no doubt be the main focus of attention in this debate for that very reason, is North East Shipbuilders Limited at Sunderland. The House may feel that it is not surprising that it should have proved far and away the most difficult—and in the event, in our view, impossible—to secure its future, given the facts that I have already recounted about its record in recent years, together with the collapse of the Danish ferry order which was originally seen as its life line. That does not alter the fact that it is a major disappointment, and I do not pretend otherwise to the House. However, it was not for want of effort by Ministers, by officials, or by British Shipbuilders itself—whose chairman travelled many thousands of miles following up any possibility offering even a glimmer of a more successful outcome.
Our determination to find a way forward for NESL, if we could, is clear from our willingness to allow successive extensions of time for possibilities to be explored. Interested parties were originally asked whether they could bid by the middle of August. When the response indicated that there was little prospect of satisfactory bids being received on that time scale, a deadline was set for the receipt of bids by the end of September. At a late stage in the evaluation of those bids, when one of the bidders sought to modify his bid, further time was allowed to take account of that. When none of those bids proved to stand up, but nevertheless there was reason to believe that other possibilities might still produce a solution, further time was allowed, until the end of November, to establish whether any of those possibilities could produce proposals that would give a firm basis for detailed negotiation, leading to our overriding requirement of a viable future for the yards.
In the course, of that process there were discussions with more than 15 bidders or possible bidders, including a number of other overseas interests. Unhappily, none of those appearing to offer the best prospects, and in particular the necessary financial backing to overcome the difficulties I described, produced bids or proposals offering a prospect of successful negotiation. Those that produced bids or proposals did not, in the Government's judgment in the light of the advice of BS and of their financial advisers, offer the basis of a viable future for merchant shipbuilding in the Sunderland yards. As I told the House last Wednesday, in our view, none of the latest proposals provided evidence of sufficient financial resources, given

the major uncertainties of the shipbuilding market. None gave evidence of sufficient work for the future. All would have involved levels of subsidy which, in one case in particular, could have faced difficulties under the sixth directive.
In reaching that judgment, we took full account of the widely canvassed possibility of a substantial order for general cargo ships for Cuba. On that, two main points must be made. First, as is all too clear from the figures I gave earlier, there is no guarantee that such an order can be secured in the face of the international competition that exists in a situation of considerable over-capacity. Secondly, it is, in our judgment—and I accept that it is a matter of judgment—highly unlikely that those ships can be built at a price that the Cubans will be willing to pay without Sunderland's incurring further losses, even after allowing for the maximum subsidy under the European rules.
Given those doubts, to have accepted a proposal that effectively depended on such an order, especially from a bidder whose financial solidity was itself unacceptable, would have been no service to the people of Sunderland or to anyone else. That is why, reluctantly but firmly, we came to the conclusion that I announced to the House last week. We believe the right course now is to concentrate on building a new industrial future for Sunderland.
I announced last week a package of measures designed to assist those who will be made redundant in the coming weeks from NESL and to promote alternative employment in the town. One of the main elements in the package is the proposed enterprise zone, offering rate relief for 10 years for new developments, a simplified planning regime and 100 per cent. capital allowances on new industrial and commercial development. That enterprise zone will provide a major new incentive to companies to move into the area, as has been the experience with zones in other areas.
The Northern Development Company is already on record as having said that an enterprise zone will significantly improve Sunderland's chances of attracting inward investment. I also announced that English Estates would be providing 220,000 sq ft of high-quality factory space, at a cost of more than £7 million. I should make it clear that I expect English Estates to have provided a substantial amount of factory space by this time next year.
The third main element in the package of measures for Sunderland, which I mentioned last week, is £10 million for the encouragement of new enterprise and employment opportunities. Half of that sum will be devoted to counselling and retraining assistance for the Sunderland work force. It is our intention that no one will have to leave NESL without having had access to the expert advice on new job opportunities that will be provided by the services offered by my right hon. Friend the Secretary of State for Employment. That advice will be offered in one-to-one interviews, with the aim of ensuring that an individual's existing skills are fully assessed in relation to available jobs.

Mr. Roland Boyes: The Minister will recall that, during last week's statement, I asked two basic questions. First, I asked how many jobs had been created to replace jobs lost in the mining industry. Secondly, I asked the Minister to investigate the magnitude of youth unemployment in the borough. I have obtained the most up-to-date figures, which may be of


interest to the Minister. There are 6,035 youngsters who are either unemployed or on a job scheme that has a finite time limit. I asked what vacancies had been notifed to the careers office by employers. The Minister may be interested to know that in Sunderland there are five vacancies, in Houghton there are none and in Washington there are six vacancies. In other words, there are 11 job vacancies for more than 6,000 youngsters without proper jobs.

Mr. Newton: I intended to say something in a moment about the number of jobs being created in Sunderland, and I shall. 1 shall study further the figures that the hon. Gentleman has just brought into the debate. However, I must make the point that it is well known that the job vacancies notified to jobcentres—I assume that the hon. Gentleman meant jobcentres—represent a substantial understatement of the jobs available in an area. A considerable amount of evidence is available to that effect.
The other half of the £10 million will be used to help new businesses to start up or existing businesses to expand. Obviously, we shall be prepared to look at any type of business that can make a real contribution to the welfare of Sunderland. These measures, which are substantial in themselves—as I said last week, they have a total value over a period of about £45 million—are, of course additional. That point does not seem to have been fully appreciated by Sunderland borough council in some of the comments that it made last week. They are additional to the help that is already available to Sunderland and will build on what is already being achieved there. They are over and above the support—estimated to be something more than £120 million—that the Government are spending this year in Tyne and Wear in general, including Sunderland in particular.
Unemployment has fallen in the area by more than 7,000 in the past two years, and some 1,000 new jobs have been created in Sunderland in the past year, thanks to the combined work of the city action team, the Tyne and Wear development corporation, the Northern Development Company and the local authorities. Sunderland continues to be helped directly by regional assistance made available to the north-east by the Department of Trade and Industry, which has created or safeguarded 135,000 jobs in the past decade.
What is particularly striking and encouraging for the future is the success of Sunderland and the north-east generally in attracting investment. It is expected that more than 3,500 new jobs will be created there in the next two to three years by Nissan, Ikeda Bussan, which makes components for Nissan, NEK Cables of Norway and Goldstar Electronics of South Korea. That is a measure of what has already been achieved in the north-east and, not least, in Sunderland, and on which we believe that the measures that were announced last week will build still further.
I said last week that the House would share my regret that it had not proved possible to find a way forward for NESL and that, at least, was clear. The House will also share my view that there is a way forward for Sunderland, which will give it the new opportunities that all of us want to see. It is those new opportunities that we are now determined to achieve.

Mr. Bryan Gould: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
That this House condemns the decision to close North East Shipbuilders Ltd. and the loss of jobs and damage to the Sunderland economy which the closure will mean; deplores the obsession with dogma which puts privatisation above the securing of orders; and regrets the unnecessary and untimely demise of British merchant shipbuilding.
I propose to waste little time on the Government motion or on the Minister's speech. I hope that the Minister will not take it amiss that he will not find it embarrassing if I say that I felt that his heart was not in it. I believe that he came to his new responsibilities and discovered that he was the prisoner of a policy bequeathed him by his predecessor and which was then foisted on him by the Secretary of State. He has tried hard to escape the trap in which he found himself, but it is unfortunate for all concerned that, in the end, he has not been able to spring that trap.
The right hon. Gentleman has approached his task today—and his task last week as well—with an appropriately heavy heart because he understands that what he has to announce means the destruction of jobs, the destruction of a major British industry and the destruction of hopes for the future of our industrial economy. It is a wanton act of destruction and an outrageous act of industrial vandalism. Like all acts of vandalism, it is all the more sickening because it is so unnecessary.
The parrot cry for so long in respect of the British shipbuilding industry has been that there are no orders to sustain it. The Minister was very fair in acknowledging that that is precisely the problem that the whole of the world shipbuilding industry has faced over a long period. There is not a shipbuilding industry in the world that has survived without subsidy, and substantial subsidy at that. I can simply counsel the Minister and regret that he and his predecessor have so often grossly and unfairly overstated the degree of subsidy on which our own shipbuilding industry has relied. The absence of orders is not the central point today.
There can be no ground for closing down what remains of British merchant shipbuilding with the excuse that there are no orders. The reason for the closure lies in the Government's obsession with dogma and their insistence on putting privatisation before commercial sense and industrial logic. I use the words "obsession with dogma" advisedly because it takes an obsessive and doctrinaire Government to be ready to kill an industry rather than
allow it to survive and prosper in the public sector. It is almost as though the shipbuilding industry is being judged on its past, rather than on its present or its future. It is almost as though this industry is being punished for the subsidy that it has received in the past, rather than being rewarded for its efforts and encouraged to take the opportunities that now open up for it.
It is true that the collapse of the Danish ferry order created an immediate and difficult problem, but even there, there is a mystery and a sense that the crisis was not wholly unwelcome to a Government who had already decided to wield the executioner's axe. The contract with Johansen subsists. Every effort to negotiate further possible buyers for those Danish ferries has met with the objection from Johansen that he still has a contract to buy them. No real effort has been made either to keep Johansen to his


contract or to declare him to be in default. Consequently, he and the Government, through their paralysis, have allowed the situation to frustrate genuine expressions of interest from about 80 potential buyers. They may not all be serious or to be taken seriously, but there are real expressions of interest in buying the ferries and none of them have been pursued.
We therefore cannot avoid the conclusion that it was convenient for the Government to discover that the collapse, or apparent collapse, of the Danish ferries order had come about at about the time when they had decided to close those yards.
An equally great—perhaps even greater—mystery surrounds the Cuban order. The Minister will accept that the Cuban order for 10 general purpose merchant ships is worth about £110 million. The seriousness of the Cuban interest can hardly be denied, but the Minister's predecessor denied it when my hon. Friend the Member for Sunderland, North (Mr. Clay) and I went to see him earlier this year and when he gave evidence to the Select Committee. The Cubans are serious, and have been serious all along, and the Minister cannot say that the order could not have been secured at a reasonable price, as no negotiations ever took place. The Cubans have merely suggested an opening target price. They have never been permitted to get to the negotiating table to start to negotiate specifications and price.
Even now, at this late stage, the Cubans continue to signal the seriousness of their interest. The No. 2 man at ASIMEX is to visit London in the next few days, and I understand that he is prepared to negotiate a deal under which he would lease one of the yards and take on short-term contract labour for the duration of the build. That would save 900 jobs, and it would keep the yard alive until we could decide whether there was an upturn in world shipping demand. If the offer is to be taken up, however, quick action is required.
I am glad to hear that the Minister is to wind up the debate; perhaps he may even wish to intervene in my speech to answer this question. The Cubans are prepared to defer placing the order elsewhere for at least another month. Is the Minister prepared to enter proper negotiations with the Cubans, and to put up a proper negotiating partner? So far, the Cubans have been unable to negotiate with British Shipbuilders, and a successor has not been put in place with which to take up negotiations.
The matter is urgent because, if the closure of the yards is finally and irreversibly notified to the EEC Commission, intervention fund assistance will be lost for ever. Has that notification yet been made, is it irreversible and is it in any sense a condition of EEC approval of the other disposals of which the Minister spoke? What we need to know—the information that is desperately needed on Wearside—is whether the door has finally been closed, or whether even now it remains open. If it has finally been closed, this debate is a charade: it has come too late and it is a debate that the Government have offered when they have already cut the throat of British merchant shipbuilding.
It appears that the Minister does not propose to intervene, but I hope that he will comment in winding up.

Mr. Newton: indicated assent.

Mr. Gould: The Minister made some play of the fact that in his view optimistic assessments had been made of the upturn in world shipping. Let me draw attention to some surveys and forecasts that suggest otherwise. A recent survey of world shipping is much more optimistic. It talks of demand rising to 30 million tonnes in the mid-1990s. There are unmistakable signs in the world shipping market—in the price of second-hand ships, in freight and charter charges and in other market indicators—that clearly show that the world upturn has at last arrived. That is why the Cubans are trying to get in early with substantial orders: they know that there will soon be pressure on capacity. That is why it is so ludicrous that the Sunderland yards are to be closed at this moment of all moments.
All independent observers would accept that, on the basis of substantial investment, the Sunderland yards have become the best equipped yards in Europe and the European yards best placed to take advantage of the coming upturn. Huge efforts have been made by the work force, to which I am sure the Minister would wish to pay tribute. The taxpayer has put in huge investment and, as a consequence, the yards are at the leading edge of new technology. Even the Japanese have visited Sunderland to see how it is done. No one can walk away from those yards without a heavy heart at the thought that that impressive capacity is to be lost to our industrial economy. To turn our back on orders and close down the yards is a vote of no confidence in all that has been achieved so far—and, paradoxically, in the very management whom the Government recently installed.
No sensible business man would walk away from a market when it was just about to turn up, or write off huge investment made or skills developed just when all those efforts were on the point of paying off. No sensible Government would abandon their indigenous merchant shipbuilding capacity just when it is becoming clear that the prizes will go to the Governments who have had the courage, commitment and foresight to stick with their shipbuilding industries. What has been the point of making the effort and of keeping faith with the industry if the Government lose their nerve or prefer political to industrial objectives just when it is all likely to pay off at last and when better times are coming? The truth is that we do not have a serious business man or a sensible Government in charge. We have in charge a salesman who sees no value in anything that cannot be sold and who would close down a vital industry rather than have it remain in public ownership.
There is a value in what is being lost. It is a value that is very great to the people whose jobs and communities are affected and to the economy of Britain. Lord Young may not have obtained the price that he wanted, but there is a price to be paid.

Mr. Dennis Skinner: Is my hon. Friend surprised at the way in which the Secretary of State is acting, given that he is only a jumped-up property developer who is not interested in the backbone of British industry? The Government do not care tuppence about subsidies; they operate a double standard. Farmers, for example, are subsidised out of the taxpayers' pocket to the tune of £13 a week for every family in Britain to ensure that their industry ticks over. The same Government wrote off £4 billion of Rover's debt so that they could hand the


company over to British Aerospace—the company to whose chairman the right hon. Member for Chingford (Mr. Tebbitt) acts as an adviser.

Mr. Gould:: My hon. Friend is on a strong point. He confirms my contention that the values of the asset stripper underlie this sorry story. If no one can be found to offer the required price for the assets, they are simply thrown away. The price that Lord Young had put on the assets could not be obtained, but there is a price to be paid. It will be paid by 2,000 people whose jobs will be lost as a direct result and by a further 3,000 whose jobs will be lost as an indirect consequence. It will be paid by the Sunderland economy.
The package that the Minister has announced is no more than a pathetic sop and a salve for a guilty conscience. The price will be paid in the destruction of a 600-year-old tradition and of the pride and identity of the shipbuilding community. It will be paid in the loss of a future for an industry that will matter greatly to our economy and our industrial base. In the end, this country will no longer be a maritime nation. It cannot now build for its own merchant fleet or to preserve, protect and develop its own trade and strategic requirements.
We are a smaller and weaker economy and country as a consequence, blind to our past and, apparently, to the future and its needs. We are the victim of a Government who see no value in our industrial economy, who care nothing and know nothing about our industrial base, who —as they say—know the price of everything but the value of nothing. The consequence is that the British merchant shipbuilding industry is the last and, in many ways, the most lamented in the long list of this Government's victims.

Mr. Neville Trotter: This sad day has been long in coming, but it has been envisaged in our debates for some time.
My right hon. Friend the Minister has given a lucid explanation of the international scene and background. Last night I read the Booze Allen report, one of the earliest documents on shipbuilding that I have seen. It came out in 1972, and what it had to say was prophetic. Let me briefly quote its conclusions:
Despite the growing world demand for shipbuilding the UK will be faced with rapidly increasing competition in the next ten years, as world-wide over-capacity becomes more severe … Government support alone cannot ensure a long term market for the industry, nor is technology likely to offer any particular advantage in the UK.
That is exactly what has come to pass. It is little comfort to us that the same has happened in all other western European countries, as my right hon. Friend pointed out.
In 1975 I visited the Swedish shipbuilding industry, which was a new creation. Modern yards had been built from scratch in green field sites. Every one of them has now closed. At that time the Swedes were second only to the Japanese in shipbuilding. I was surprised that a small country like Sweden could have achieved such a position, but it had. The whole industry came and went within about 10 years. The reason has basically been competition from the Far East—cheap labour competition, especially from Korea—which came about at the same time as a tremendous fall in world demand for ships. In 1974 over 200 million tonnes were on order; now the figure is down

to 33 million tonnes. Last year, only 16 million tonnes were built. That in itself is almost a halving of the amount built the year before.
My right hon. Friend referred to the vast sum of public money that has gone into the industry in this country. I compute it as about £1 million for every working day that British Shipbuilders has been in existence. If I have a criticism, it relates to whether that taxpayers' money has been spent to best advantage. It does not seem to me to have achieved much. I understand the arguments that supported it at the time, but I cannot help wondering whether we might have obtained better value by using it in different ways.
One way in which we might have used it would have been to help our Merchant Navy more. If we had put more funds into supporting our shipowners, we might now have had a more assured order book for the future. I think that Govan comes best out of the recent dramatic events. It has an assured future by having a shipowner as its owner, which makes a good deal of sense. I had lunch today with a foreign shipowner who owns a yard in his country. He believes, as I do, that that is probably the key to success for western shipbuilding—that there should be a natural market from the yard owner's own fleet. Of course, he can also sell ships to others if circumstances permit.

Mr. Ted Garrett: There is a slight contradiction in the hon. Gentleman's argument. Only this afternoon I heard that more redundancies are to be announced tomorrow at Swan Hunter, whose work force in Tyneside is shared between his constituency and mine. That contradicts the argument that private owners know best what is best for their business.

Mr. Trotter: Swan Hunter lost out on the last frigate order because, as the hon. Gentleman knows, it was considerably undercut by the other frigate builder. I am happy to tell the hon. Gentleman that, when I last talked to Swan Hunter's management, they said that they now thought that they had got their sums wrong and believed that they could have put in a lower bid in the light of what they know now. I am hopeful that, in the next round of frigate orders, Swan Hunter will be successful. Everyone agrees that it is a very technically competent yard. I am sure that the hon. Member for Wallsend (Mr. Garrett) thinks so as well, and hopes, as I do, to see more frigate orders going there in future—which, of course, would lead to more employment in the yard.
When will there be an upturn in the merchant shipbuilding scene? I do not expect one until the second half of the 1990s. The Drewry shipping consultants, in a recent in-depth study, forecast a further decline in western Europe as the industry concentrates in the far east. Sadly, I also believe that that will happen. I do not think that the House fully appreciates the scale of competition from the Far East with which we are faced. The Japanese export some 16 ships every month; we are not able to export 16 in a year, and nor are the other western European countries. The Japanese and Koreans together have over 300 ships on order, a total of 22 million tonnes. My right hon. Friend read out figures for the fall in the labour force in the main traditional shipbuilding countries, but I think that he will find that the Koreans have added some 100,000 men to their labour force at a time when the rest of the world has seen labour forces contract.


The various hourly wage rates are quoted in dollars, because that is the currency of international shipping. In the United Kingdom the rate is approximately $9 an hour. In Korea it is approximately $3 an hour. The Koreans also work about twice as many hours a week as western Europeans are expected to work, and of course they do not have the overheads of modern western industral society. In general, Korean yards have the advantage of paying only about a fifth of the labour costs paid by our yards in Sunderland or other Western European countries.
Recent figures show that the cost of building a bulk carrier in a typical European yard would be $21 million, and that the far east price was $12 million. In other words, the prices being fixed by our low-cost competitors in the far east are being fixed at a figure a great deal lower than the cost of building the ship in this country—in some cases, lower than the cost of the parts that go into building it. The 28 per cent. intervention fund has proved wholly inadequate to meet the competition, and the result has been losses that, in Sunderland, have been running at a rate of £1 million a week. That is due to the world price being fixed by yards in the far east whose workers are paid a fifth of the wages that we pay. These are the facts of life for this country and for Holland, Germany, France, Sweden and the other former shipbuilding countries of Europe. Korea has trebled its capacity while the western European industries have been declining. Now Korea and Japan produce four times as many ships as the whole of Europe put together.
We have been forced in desperation to take dubious contracts, with inevitably huge subsidies and heavy losses on top of that. We have been faced with customers who have no money and want 15 years to pay, or go bust like ITM in Sunderland or renege on the contract as the Danes did.
My right hon. Friend the Minister of Trade and Industry shares my deep concern over the decision that has had to be taken for Sunderland. I congratulate him on the package that he has put together to seek to create new jobs for the future in Sunderland. The total sum has been decried and derided as inadequate, but it works out at £20,000 for every man working in the yard. In addition, a significant sum of redundancy pay is being paid into the community. If it is anything like that paid out in previous cutbacks in the shipbuilding industry, it will be about £10,000 to £11,000 per man. In total there is a massive sum going into the community in Sunderland.
We must all seek to put that money to the best possible use to ensure jobs for future generations in the town. It is no good looking back to the past with pride—however much we are entitled to do so. We must look up the river to Nissan and the industries of the future.
As my right hon. Friend said, there has been a significant fall in the number of unemployed in Sunderland. Unemployment is a desperate problem in that town; nobody could say otherwise. However, there has been an encouraging fall of 7,000 in the past two years and 4,000 in the past year. The number of jobs in shipbuilding in Sunderland has already fallen from 7,500 a few years ago, to 2,200 today. That fall of about 5,000 jobs has been dealt with by the creation of new jobs at Nissan and elsewhere. That is what we must continue to do in the three

or four years ahead, by means of the various schemes introduced by my right hon. Friend. It is wrong to decry the nature of those schemes or their magnitude.
Yesterday, the Northern Development Company said that the mood was favourable for new jobs and businesses in the north-east. It saw the new enterprise zone in Sunderland as an attractive feature to new businesses coming to set up in the north-east from abroad or from other regions of Britain. We have not yet heard any details about the enterprise agency proposed by my right hon. Friend. I await those details with great interest because that agency will have a very important part to play for future generations in terms of jobs and the creation of a new spirit in the town.
Tyne and Wear chamber of commerce is particularly strong and will be prepared to accept the challenge. One of the features of the past few months has been the tremendous co-operation between all sides in Sunderland in seeking to save the yards. In the years immediately ahead, we must show the same co-operation in seeking to replace them with future employment in modern industries. The proposed schemes will work towards that end. There is a great deal of Government money going into them and there must be co-ordination of the efforts of all those in the region, whether it be the urban development corporation which concentrates on redeveloping the river banks, the Northern Development Company which attracts industry to the region, or English Industrial Estates which is the Government's industrial promotional agency for property and is creating new factories in Sunderland. All those must work together to provide a future for Sunderland based on secure jobs for the long-term future and not what have come to be give-away ships, for there cannot be a sound future for Sunderland based on continuing to build give-away ships.

Mr. Bob Clay: The decision announced last Wednesday has been widely described as industrial vandalism. Those words are not rhetoric; they are accurate and specific. Vandalism is about wanton destruction, and there is no doubt that this destruction is planned, calculated and deliberate. Vandalism is also about unnecessary destruction and I hope to prove that this destruction, if it goes ahead, is wholly unnecessary.
I concur with my hon. Friend the Member for Dagenham (Mr. Gould) that the Chancellor of the Duchy of Lancaster wanted to find a solution. That is shown by the number of postponements of the closure decision. I thank him for that. However, as I have said before, tragically he inherited a course of events set by his predecessor, the right hon. and learned Member for Rushcliffe (Mr. Clarke). In order to avert that course of events, he had to reverse some aspects of Government policy or overcome difficulties within his Department and British Shipbuilders. However, if he really wishes to retain a viable shipbuilding industry on Wearside, there is a chance for him to do so.
On Monday I attended the launch of the last ferry from Southwick. It was a moving occasion; many people felt empty and unable to comprehend the fact that that beautiful ship, built in that magnificent facility, would probably be the last. In Sunderland, the reality that hundreds of years of tradition are coming to an end is still sinking in.


If the workers in the yards and the people of the town felt that we were facing a lack of orders, they could learn to live with the bitterness. If they felt that they had been working in an out-of-date facility which needed massive investment in plant and machinery that could not be provided and that it could not keep up with other yards in the world, it would be easier to bear. If they felt that they were operating in a declining market and that there was no future for the industry, it would have been bitter and difficult to take, but they might have been able to swallow it. However, the opposite is true; that is why people are so angry.
I pay tribute to the managing director of North East Shipbuilders, together with the rest of its management, work force and shop stewards, who have had to live through months of torture. I pay tribute to all the parties on the council, who were all opposed to what the Government were doing. I pay tribute to the people of the town who have been united in their wish to save the yards.
It is worth referring to the compliment that the Prime Minister paid to the quality of the work and the management and work force in the yards less than three years ago when she named the Stena Seawell. She paid a glowing tribute at that time and said:
We have the skills, the enterprise, the inspiration to do it — I hope we'll be able to do a repeat performance by virtue of the tremendous advertisement we can blazon across the world".
She referred to it being a modern ship and mentioned the latest technology. All that has been put on record many times.
It is interesting to refer to a speech made in the House at the time by the right hon. Member for City of Chester (Mr. Morrison), who was then the Minister of State:
Building ships more efficiently is the key to delivering them on time and to the owners' satisfaction. I have already referred to the fact that my right hon. Friend the Prime Minister named the Stena Seawell last Friday. The delivery of that highly complex vessel on time and in perfect condition speaks volumes for the dedication and effectiveness of the Sunderland management and work force. It is the best kind of advertisement that the industry could have, and it is worth more than any amount of Government support. I am sure that all right hon. and hon. Members will join in applauding that success."—[Official Report, 28 April 1986; Vol. 96, c. 683]
It is remarkable that Ministers were praising the yards at that time and that they are now announcing closures.
As my hon. Friend the Member for Dagenham said, it is all happening because the Government put the dogma of privatisation before commercial necessity. The tragedy is that, unlike any other privatisation, whatever the ideological merits of the argument, the privatisation was stumbled into almost by accident. The right hon. and learned Member for Rushcliffe intended that the yard should close because it had no orders. Then an extremely embarrassing thing happened. There was a possible order from Cuba and that is where the trouble started.
The right hon. and learned Gentleman pretended that he had never had an intervention fund application, even though, as he told the Select Committee, the chairman of British Shipbuilders had written a letter in the normal manner setting out the deal and asking for intervention funds. However, the Minister's predecessor persisted in effectively misleading the House by saying that he had never received such an application. Eventually it became

clear that a form should have been filled in but that he had told the chairman not to fill it in, but to write a letter instead.
By then it was clear that there was this order, so the intervention fund application was made. The line then changed. The intervention fund could not he used unless the yard was privatised. The point that was made at the time, and that is still made, is how on earth can we expect to find a buyer for the yard when the yard's forthcoming order book has not been finalised? If the Government had been serious about privatising NESL instead of closing it, they would have encouraged British Shipbuilders by helping it to obtain the Cuban order. Then the Government would have talked about privatisation. By doing it the other way round, the Government sounded NESL's death knell.
The Danish ferries have already been mentioned. I believe that the DTI did not want to solve that problem. It is a peculiar coincidence that this week, within days of the announcement of the closure of the yeard, Mr. Johansen, who originally defaulted on the 24 ferries contract, is about to sign a contract for six ferries from British Shipbuilders, in addition to the two ferries that he has already ordered.
If Mr. Johansen is buying six ferries from British Shipbuilders to settle the deal and get it out of the way, why did he not buy six ferries from British Shipbuilders six months ago? I am becoming increasingly suspicious about it. I remember that the right hon. and learned Member for Rushcliffe announced almost gleefully in this place that there were problems about the Danish ferries contract. Then I found out that in March, six weeks before any public announcement, the Prime Minister had told a Conservative councillor in Sunderland that there was a problem about the contract. Why on earth had the Prime Minister been briefed about that long before anyone in Sunderland knew about it, other than this Conservative councillor? I think that it smells.
As for subsequent events, I hope that the Minister will not deny that the Export Credits Guarantee Department, not British Shipbuilders, could have stopped that contract with Mr. Johansen. He defaulted to the ECGD and the Department could have cross-defaulted the whole contract. If it had done that, either Mr. Johansen would have had to pay up and Sunderland would have continued to build the ferries for him, or he would have been out of it and somebody else could have come in.
We know that some of the inquiries have not been serious, but I understand that there have been sufficient serious inquiries about the ferries since British Shipbuilders cancelled the contract with Mr. Johansen. Nevertheless, every time somebody seriously proposes to buy any ferries, British Shipbuilders is scared off because Mr. Johansen threatens litigation again. The ECGD and the Department of Trade and Industry should have dealt with that. Sunderland would probably still be building ferries instead of facing the problems that it faces now. The Minister's predecessor was quite happy to allow the persecution of British Shipbuilders by that evil man from Denmark to continue so that it would provide an excuse for closing the yard.
Despite the default on the ferries, there was the Cuban order. That was not an obscure order from a small island on the other side of the world with a different political system. In shipping terms, Cuba is a massive nation. It has one of the world's biggest fleets. Its fleet is expanding, and


23 ships of the existing fleet were built on the north-east coast of England. Why was Cuba so keen to place the order in Sunderland? It has a greater respect for the technical qualities and abilities of that yard than our Government. The Cubans made it clear throughout that they liked the ships and that they wanted more of them. They have bent over backwards to place the order in the north-east.
It must be unprecedented for another country that is trying to place such a large export order in the United Kingdom to be so abused, to have so much misinformation and misrepresentation put around about their intentions and effectively to be spat upon by our Government. There was misinformation about the price that Cuba was prepared to pay. It said that it wanted to negotiate the price. Cuba sent a letter of intent, which it said would be transferred to other bidders. In that letter Cuba said it would negotiate at about £10·9 million per ship. I have heard civil servants and those in high positions in British Shipbuilders say that they would not pay even £2 million less per ship.
When I organised the bids for those yards, I recall informing the chairman of British Shipbuilders that the Cubans were prepared to make a stage payment of 20 per cent. when the contract had been signed. It would have been one of the most generous stage payments ever made. It would have provided the yard with a huge cash flow advantage, with 20 per cent. of the contract up front. I was told, "I just don't believe that. They would not do it. Why should they?" However, on the same day as I was told that, the Cubans' financial adviser at Lloyds bank informed a senior civil servant in the DTI that that was what his customers were prepared to do.
It is quite scandalous that the Minister should say that these bids and the Cuban order have been seriously assessed when so much misinformation went unchallenged. Cuba wanted 10 ships and 10,000 containers. That is £15 million to £20 million-worth of work on top of the ships. Cuba was interested in training Cuban shipyard workers so that they could then return to Cuba and work in the industry in Havana. Cuba thought that it might be possible to send an occasional repair job for Cuba to the River Wear. It offered to set up a joint marketing company with the yard to sell the yard's products in Africa, the far east, Latin America and other places where they have influence. It also offered a five-year co-operation deal with the yard on marketing and other projects, but we are told that all that is not serious.
I return to the point that was made earlier. Having described the loss of British Shipbuilders and the state that the industry was in, the Minister said:
Against that background, it was clear to my predecessor tand to me that a solid future for the yards depended on finding new owners who could run them in a viable way." —[Official Report, 7 December 1988; Vol. 143, c. 318.]
If that is their view of how British Shipbuilders has run the industry, it is a little odd that it has been left entirely to British Shipbuilders to judge who would be an appropriate buyer.
As for the bids that were made, in the case of each of the four early bidders there were complaints about their treatment. Regardless of the merits of their bids, all the bidders said that the goalposts were moved, that new conditions were laid down after they had been told what

the conditions would be, and that when those conditions were met even more conditions were found about which they had not been told in the first place.
Now that we have run out of time, I must ask the Minister a crucial question. Why was there a relaxed seven-week delay in the summer during the bid process? The bidders were asked to bid by 15 August, but they were then told that their bids need not be placed until 30 September. I have heard it said that the bidders wanted more time, but the four who eventually submitted bids have all told me that they were prepared to bid by 15 August. I know that two of them complained in writing about the deadline having been put back.
Somebody has been guilty of the most appalling incompetence. The entire privatisation process that the Government wanted to pursue was held up for seven weeks. We could have been seven weeks further on. We should then have been seven weeks less away from the end of the year and there would still have been a chance to produce a satisfactory result.
Included among the early bidders was the owner of the West German shipping company, the Egon Oldendorff line. The hon. Member for Tynemouth (Mr. Trotter) referred to the importance of shipowners being involved in the ownership of yards. He was prepared to bring to the consortium an order for six 33,000 tonne bulk carriers. He was on the point of placing that order in Korea. The contract was within days of being signed. He sent a letter, of which I know the DTI is aware, in which he said that he would withdraw that order from the Inchon yard in Korea and place it in Sunderland at a higher price. Perhaps the price was still not good enough, but when big German shipowners make offers such as that it is criminal that bids should be rejected out of hand and that a yard should have to close.
It is interesting that that shipowner said to me later that, if he were to become involved in any other consortium or in any other form of ownership bidding for NESL, he would do so on condition that if his name were mentioned, even in confidence, to either the DTI or British Shipbuilders he would pull out of it. The House will have to make its own judgment about why shipowners and others appear to be so paranoid about their names being mentioned to the DTI and British Shipbuilders. That, though, is how they feel. That is what I have been told. Privatisation is made rather difficult when the people who can be involved and provide takeover backing are nervous about how their names are used. I shall later relate my own experience of that.
When the Chancellor told the House that he would allow a little more time for bids to be put in, I decided, but not out of any commercial interest, to try to put something together. I thought, "No one else is doing it," I knew that the Cubans were interested, but I decided to put in a bid myself. I sent a letter to the chairman of British Shipbuilders which was copied to Lazards and the DTI. In it was the name of Mr. John Hall as a potential substantial investor. The letter clearly said, "In Confidence" but within 24 hours the public relations consultant of British Shipbuilders had leaked his name to at least six journalists to my knowledge. That has been one of the common problems experienced during the privatisation process.
When I asked for some financial information from an NESL director, he understandably said that I had to sign a letter of confidentiality and that I would have to get such a letter from British Shipbuilders' headquarters. I


telephoned BS headquarters and was told, "No, no, no. You get it from Lazards." I telephoned Lazards and was told, "No, no, no. You should get it from British Shipbuilders, but we will send you one anyway to save time." That demonstrates that nobody knew what they were doing or what the rules were right from the start.
On 28 November, I received two letters. One was from Mr. Reg Arnell, board member for finance of British Shipbuilders, refusing for the second time to tell me what the alternative use valuation of NESL was and that he did not see any good reason why a bidder should want to have that information. The other was from David Coates, head of the shipbuilding division of the DTI, saying, among other things, that I ought to understand that BS's recent alternative use valuation for NESL was £9 million to £10 million and that, if I did not bid near that price, the Commission might regard the difference as an operating subsidy and count it against intervention fund on future contracts. Therefore, while BS told me, "We will not tell you—you do not need to know," the DTI was telling me, "You had better know because you will be in trouble if you do not." Brilliant!
When I complained to the chairman of British Shipbuilders about being treated in that way, I was told that he had told me the information personally six months previously, so why was I complaining? I thought it extraordinary that information apparently given in confidence to me as a Member of Parliament might be used later for commercial purposes. As a result of being abused in that way, I do not feel particularly bound by any confidences made subsequently.
On the Friday after the bid was submitted, I received a letter, again from Mr. David Coates, head of the shipbuilding division in the DTI, saying that a key part of my proposal was not acceptable to the European Commission. He had written to me on 21 November saying that it was acceptable. I am quite sure that he said that in good faith. He got it wrong, which is fair enough. However, when I was told two days after I had put in a submission that a key piece of information, which came from the DTI, was wrong, it might have given me a bit more time to sort it out. I was told that a key part of the proposal was not acceptable at 4 pm on Friday afternoon. The following Wednesday, the Minister was in the House announcing a closure.
On the same Friday, I was told by Mr. Lister, the chairman of British Shipbuilders, that the proposal was good, but not good enough. He told me that Lazards had already done an assessment of the financial side of the bid. It was clear to me from what he said that some things had been added up twice. Repeated requests for meetings were made by the consortium but, as was not the case with previous bidders, those requests were refused. Even meetings with the consortium's accountants, financial advisers or solicitors were refused.
The consortium's accountants telephoned Lazards and asked whether it had done the assessment. Lazards said yes. The accountants said, "We would like to talk to you, as we think that there may be some misunderstandings," but Lazards replied, "It is too late. We have already told British Shipbuilders what our conclusions are." That is an absolutely incredible way in which to conduct matters. I do not know how the Minister can say that the issue received serious consideration. We asked for meetings in our original proposal and in our revised proposal, and telephone calls asking for meetings were made.
Finally, on the Tuesday before the Minister came to the House to announce the closure, I spent the morning accompanied by my hon. Friend the Member for Gateshead, East (Ms. Quin). When we talked to Mr. Coates from the DTI about certain aspects of the proposal, he said, "Do you really want to meet British Shipbuilders?" "Of course I do," I said. He arranged it. He told me to be at Knightsbridge at 3.30 pm that afternoon. We finally got a meeting. A careful assessment of the proposal was supposed to have been made. The meeting was at three hours' notice, so it was impossible to bring in any advisers or other members of the consortium. And the Minister says that this has been a serious process.
We were hounded at the meeting about the consortium not having enough financial backing. We were told when the meeting started that Tom Burlison, the regional secretary of the General, Municipal, Boilermakers and Allied Trades Union, had telephoned Mr. Lister before the meeting. Mr. Lister's account of the conversation was that Tom Burlison had telephoned and said that GM BATU might stump up a bit more money. Mr. Lister said that his response was, "Can you write out a cheque for £10 million here and now?"—a pretty facetious question. The response was apparently no.
John Edmonds, the general secretary of the union, was present when Mr. Burlison made the telephone call and confirmed his account of it, which is that Mr. Burlison said, "Give me three weeks and I shall raise the money." We were hounded for three hours about financial backing, when Mr. Lister had just been told that somebody was prepared to raise £10 million in three weeks.
Is the yard really to close because of those three weeks? There was another extraordinary incident at that fatal meeting on Tuesday afternoon. When we were being pressed on equity, it was pointed out that the potential investment by managers at the yard had not been counted. I found it extraordinary that that was the first time that they knew that any managers wanted equity in the yard. In the proposal which we submitted was a letter from Brian Tennant, the production director of NESL, saying quite clearly that managers were being asked to contribute equity. If Mr. Lister and Lazards were unaware of that, they could not even have read the proposal. That is how serious the consideration was.
The meeting got even funnier. When I said, "You know it now. Here is the letter which was in the proposal. The management will offer some equity"—some senior managers support the consortium; it is effectively a management buy-out as well as a work force buy-out—I was told, "That does not make any difference because managers are not allowed to use any of their redundancy money in British Shipbuilders disposals. That is a British Shipbuilders rule." I do not know whether it is a good rule or a bad one, but it is a pity that bidders were not told that in the first place. It is a bit odd that something that goes on in all other management buy-outs turned out not to be allowed here the day before it was announced that the yard is to close.
The whole thing has been an absolute scandal. It is a scandal in the wider sense that 2,000 jobs have been murdered and British merchant shipbuilding has effectively come to an end. It is also a scandal that the process should have been dealt with in such a way. The Minister must say more about the role of the European Commission. We have heard that, if BS makes the work


force redundant and a new owner re-employs some workers, the redundancies—or some of them—will count as operating aid and against contract aid.
The yard has no work at the moment. That is the Government's responsibility because they delayed the Cuban order. People are being laid off as a result. We are told, however, that lay-off pay counts as operating aid and will be counted against intervention fund and in future. The steel and equipment for the nine ferries have no more than scrap value, but we are told that, if BS allowed a purchaser to take that material and equipment, its full original cost would count against intervention fund. We are told that British Shipbuilders' losses count against a future owner. I suspect that behind the Minister's words, "Haven't I done well? We have done five successfully; it is a pity about NESL," is a reason for British Shipbuilders to wash its face for the other five—Clark Kincaid, Ferguson, Troon, Appledore and MDC. They are closing NESL so that they can have an easy time with the Commission on the other disposals. Whatever the Minister says, I shall never believe anything different.
At the end of the day, whether or not all the rulings or advice from the Commission are true, no formal proposal was ever put to the Commission before the proposal to close the yard. We are entitled to know the cause of death. Doctors have to put reasons on death certificates; they cannot say, "It might have been a bit of cancer, but he did have bronchitis and he broke his leg two years ago".
Was it the European Commission? Did the rules of the sixth directive make it impossible for a new owner to take over? Was it the fact that the yard had no orders? That has been clearly shown to be untrue. Was it the privatisation process itself? Was it Mr. Johansen? Was it all those reasons, or did the Government welcome all those excuses to propose closure because ideologically they no longer wanted to support shipbuilding?
The final tragedy is this. I shall not spend much time on it, but when I look at the £45 million rescue package I ask myself the following question. If a big industry had just closed on the River Wear and an intelligent consultant was brought in to suggest what could be done to restore jobs in the area, he would say, "It is a riverside site. Let us find something appropriate for it. Let us find something which can produce exports because we have a big balance of payments problem. Let us find a growing market, albeit a weak market in recent years, but one that is on the upturn." When they considered all those points, they would probably say, "Let us start shipbuilding on the River Wear. There is a market, it is a riverside site, and there is an order available to start it."
If it were an empty site, the capital investment in machinery and equipment would be too much. It would certainly be too much for the Government. But that is not the case; the stuff is already there. The Government plan to pull it down. People might say that it might take time to get a skilled work force together to specialise in such activities. The work force exists, but it is being sacked. If shipbuilding were not there already, there would be a unique opportunity to start it, but the Government will not do that. Instead, they will close it down, and that is why people feel so outraged. If we had to swallow

privatisation, at least it could have been done fairly, not with the idiocy, incompetence and corruption of the way in which it was carried out.
Hoping to end on a more positive note, may I say that, even at this stage, the Cubans, who apparently were not serious and who suffered so much abuse and misrepresentation, are so anxious for their ships to be built in those yards that they have said that they will not place the order anywhere else for another month. They are still hoping that a solution can be found.
The proposal is that at least we could save Southwick, a yard built specifically for volume production of the ships that the Cubans want. At least we could give it two or three years' breathing space. The Cubans could lease the yard from BS, a residuary body, the DTI, the Urban Development Corporation or whomever ended up owning it. Let the Cubans lease the facilities. Let them take whatever intervention fund is available next year after various bits and pieces have been knocked off by the redundancies, British Shipbuilders' operating losses and so on. Let them take whatever intervention fund is available. Let them have the credit terms which were always available and which other member states allow.
The only contribution that the Government have to make is to give decent credit terms to people who the Government have acknowledged always pay on the nail and never default. Let them take the yard and find a shipbuilder—a distinguished shipbuilder is available elsewhere—to manage the contract for them, and let them employ local workers in Sunderland to build that contract. Let them do it at their own risk, so that, if they get only nine ships instead of 10 ships for their money, that is their risk. There is no financial risk to the British Government.
The Government need only say yes and agree credit. It would provide a breathing space and allow us not to have to finalise the debate about whether there are further orders and whether there is an upturn in the market. In the two or three years that the contract is being built, we shall find out. It would keep a foot in the door.
What possible reason can the Government have for refusing that proposition if the Cubans are prepared to agree to it? It suits everyone. There is no problem about transfer of ownership; the Cubans would lease it. There is no question of losses for the Government; it would be done at the Cubans' own risk. If the Minister says, "Yes, we shall give it a try," and immediately withdraws the notification of the closure of Southwick to the Commission—there is to be a meeting in seven days' time and the Commission will need a change of notification well before that meeting—I shall believe that he genuinely wanted to save something and finally had the opportunity to do so.
That proposition meets every objection that the Government have raised to every previous proposal. It meets all the objectives, it retains shipbuilding at no loss to the Government, it saves at least a few hundred jobs for people who wish to remain working in shipbuilding, and it gives us a breathing space to decide what to do in the long term. If the Minister says no to that, he will confirm the notion that, whatever his own feelings, the Government started something several months ago that they would not allow anyone to change—even one of their Cabinet Ministers.

Miss Emma Nicholson: I speak as a Member with shipbuilding responsibilities—Appledore is in my constituency—and family and political links in the north-east. My father was a Member of Parliament for Morpeth and I fought Blyth, as it was then, before the hon. Member for Blyth Valley (Mr. Campbell) took his seat. Further, I was a management consultant with 10 years' hands-on experience in heavy and light industry.
I was intrigued by the lengthy speech of the hon. Member for Sunderland, North (Mr. Clay) pinning his case to the two words, "economic vandalism". He used those words with intensity; he said he meant them and that they were the purpose of his speech. If he really meant them, perhaps he will allow me to examine those two words.
If the phrase means anything at all and is not just two words plucked out of the Oxford dictionary, it must mean the wanton destruction of something that is financially healthy. As a former management consultant, I must say that that means to me a company with full order books, an expanding work force and a bright future, with buyers clamouring for appointments and with the managing director and chairman with their sleeves rolled up, working exceptionally hard and being desperate for time, with the telephone constantly ringing. Alas, the truth is very different from the way in which the hon. Member for Sunderland, North described recent months for NESL. It would appear that it has been dependent on Members of Parliament to make its business appointments. That cannot he right.
In chasing the Cuban rainbow, the hon. Gentleman overlooked the fact that Cuba is a Communist republic where key workers send their children to fee-paying private schools. That is bad news in his terms.

Mr. Clay: Will the hon. Lady give way?

Miss Nicholson: When hon. Members want another to give way, they normally rise to their feet. Therefore, I shall continue.
If the mythical consultant to whom the hon. Gentleman referred went to look at NESL after closure, would he honestly propose such things as the hon. Member for Sunderland, North suggested? Would he honestly say that in a declining shipping market the one thing that we should do for Sunderland is to bring in more shipbuilding? He would not. He would suggest small businesses. He would suggest that the outposts of large and flourishing businesses should be tempted to go there by such things as the Minister has announced—for example, enterprise zones.
Sadly, NESL, which is a fine facility, is not in a niche market. It is in open competition. As my hon. Friend the Member for Tynemouth (Mr. Trotter) said, it competes with shipbuilding yards in countries such as Korea, which pay wages that we would not tolerate. NESL is exposed to open competition in the world market. It has not built the niche that would enable it, in a difficult world market, to pursue its business in such a way as to make it financially viable.
The small Appledore shipyard in my constituency, which will soon be known as Appledore Shipbuilders, provides a good opposite to NESL. It has been able to carve out a niche market in dredgers. I am delighted that,

following ministerial help, John Langham of Langham Industries fully expects to complete all the negotiations next week and effectively to take over the yard at the end of the month. He envisages no problems. Everything is geared up—the management is in place and already there is a firm letter of intent relating to a large aggregate dredger, which will provide work for the yard until July 1990.
Because John Langham has been actively marketing and promoting the yard, he has discussed contracts for two further dredgers to be built following completion of the large dredger, or slotting in with its construction. With orders coming in, it is possible to juggle and to get more work. Mr. Langham aims to re-enter the market for small corvettes, or gunboats, which would provide coastal protection for foreign navies in the far east. The yard built minesweepers for the Royal Navy after the war, but the market faded. Private enterprise will probably bring the yard back into that market. Langham Industries is quietly confident that it can turn the company around. Like NESL—indeed, like all British shipbuilding yards—Appledore has been a loss-maker. The proper objective is to make it fully profitable. Langham Industries aims to break even within the next 18 months.
What is the difference between a company that is nationalised and run by the Government—perhaps I should say "run down by successive Governments", because Governments are demonstrably bad at running industry—and one that is private? The difference is motivation. The Opposition talk scathingly about "profit making". What is wrong with profit making? Making a profit means that one can look after not only one's family but a large and expanding work force. It means bringing money into areas and making things happen. It means doing what we all want to do—raising the economic level and increasing people's happiness. The key is to get our shipbuilding companies into the hard commercial world in which we must all live. We cannot seek Cuban rainbows or live in Alice Through the Looking Glass worlds.
Shipbuilding is still bumping along with the barnacles scraping the bottom. There has been only a marginal improvement. No one knows whether the improvement is sustainable. It is folly to pretend that a marvellous world is around the corner. That chimera has floated further and further away over the many months of the continuing debate on the privatisation of British shipbuilding. There is a long way to go in the shipbuilding market. We must learn to live off what is available.
How does the sale of Appledore, a small but crucial yard, compare with NESL's failure? Private industry saw NESL as unviable, even at a rock-bottom price. It was given subsidies of many millions of pounds a year. The yard lost more than £100 million over three years, with £66 million lost last year alone to keep 2,000 jobs going. Can that be logical and proper?
The loss of those 2,000 jobs is a minor run down compared with the massive run-down under the last Labour Government. Between 1974 and 1979, about 10,000 jobs were lost. Is that not the death sentence—pronounced then and not today—to which the hon. Member for Sunderland, North referred? The hon. Gentleman has now disappeared from the Chamber. Those 2,000 jobs lost are little enough compared with the haemorrhage earlier.
It was a shame that the Labour Government closed the last ship repair yard on the Wear, Greenwell. I understand


that the area may return to ship repair work, rather than shipbuilding. I am glad that Sunderland's economic base, as in so many depressed areas, is now much sounder than it was under Labour, when large losses were suffered. Perhaps due to the general upturn in the economy under the Conservative Government, it will now be easier to find jobs for those 2,000 people.

Ms. Joyce Quin: Surely the hon. Lady accepts that, under the Conservative Government, the losses in shipyards in Tyne and Wear have been far greater than in any other period. The losses under Labour about which she talks simply do not compare with the huge haemorrhage and losses experienced since 1979.

Miss Nicholson: Because of the better economic conditions under the Conservative Government, it will be much easier to find work for those people who are now losing their jobs. The yards suffered much more under Labour, just as pit after pit was closed in Durham under Labour. My right hon. Friend the Prime Minister helped a tremendous amount in trying to find orders for the yards.
The hon. Member for Dagenham (Mr. Gould) described the closure of NESL as a destruction of jobs, major industry and hopes for the future. He was totally wrong. It marks the creation of jobs which will last in industries which are for the future. It marks the creation of small and large industries which will give young people a viable future. It marks the creation of hope, which will help the area much more than continued propping up of an industry which, alas, is past its best. It is not a matter of dogma on privatisation or, as the hon. Member for Dagenham said, putting privatisation dogma before commercial sense and profitability. On the contrary, we are putting commercial sense and profitability before the dogma of nationalisation.

Mr. Ted Leadbitter: During the past three decades, there has been bloodletting in the shipbuilding industry that cannot be matched in by any other industry in the land. During the 1950s, our shipbuilding industry was the largest in the world. In 1985, we were promised, in a statement by the Minister for Trade, that our 1·25 per cent. share of the world market would be increased. But there has been a dramatic decline in the industry. We do not hear such words today. The labour force has decreased from 85,000 to between 45,000 and 40,000.
The Government have been tricky again. The Opposition demanded a debate on the Sunderland closure, but the motion is about British shipbuilding and the successes of privatisation. It says that some parts of the industry are not viable, and that is the end of that. The motion does not deal specifically with the subject about which we talked last week. I challenge the Minister about the calculation behind the Government's statement. I have made it clear that it was convenient that the Prime Minister had returned from Gdansk in Poland, where there is a shipbuilding yard.
My hon. Friend the Member for Sunderland, North (Mr. Clay) has given us a remarkable account of the to-ings and fro-ings and the misinterpretations, confusions, contradictions and political nepotism. However, if the Prime Minister had intended to keep the Sunderland

yard open, she would have gone to Poland and said to our Polish friends, "In Britain, we have done what you want here in Gdansk," but the decision was already made. She must have known then that she did not intend to save the Sunderland yard.
The Chancellor of the Duchy of Lancaster has a remarkable reputation for understanding the issues with which he deals, but he is not master in his own house. It is sometimes embarrassing to be a parrot for the man in the other place, the Secretary of State for Trade and Industry. The Chancellor has had an unpleasant task which he did not deserve and I absolve him from responsibility for the decision that has been made.
On the other hand, as the Chancellor of the Duchy of Lancaster is a good Member of the House, he might have felt a little upset. He might have said, "I don't like what's going on here. I'll resign." Last week's statement contained no feeling at all for the kind of Christmas card that has been sent to the Sunderland workers.
The hon. Member for Tynemouth (Mr. Trotter) talks glibly, as I have known him talk for many years. He said that he had a chat with the chairman of the Northern Development Company, who apparently said that things were looking buoyant and that jobs were coming up. However, if we start off from a low level of economic activity and there is an upward trend, it is easy to feel buoyant.
I come from a part of the world not far from that of the hon. Member for Tynemouth, but I am an expert on closures. If a shipyard worker, instead of the hon. Gentleman, had gone to see the chairman of the Northern Development Company to ask him about the economy in the northern region and the chairman had replied that things were buoyant, what would the shipyard worker do when he and 2,000 or more of his colleagues lost their jobs?
We have not yet mentioned the multiplier effect. The service and supply industries will also be affected so, in all, about 5,000 jobs will be lost, although, if I am conservative, perhaps I should say 4,500 jobs will be lost in all. It would not please that shipyard worker for the chairman to talk about buoyancy if his skills, pride, hopes and aspirations for his family are suddenly shattered. In any case, the poor guy can live, even when he is in work, only by obtaining a little credit to help him over Christmas.
In 1962, my constituency lost a shipyard. I am an expert in industrial closures in a town of 90,000 people, where only about 30,000 have jobs. In 1962, we lost 5,000 jobs and, in the following 15 years, we lost almost 20,000. I know what it means and I am heartily sick and tired, after 25 years in this place, of listening to the same glib chat with Conservative Members saying, "We'll mend it. We'll put it right. Let's have a task force." What will we do with a task force? We simply bring in civil servants, give them a job and call it a task force.
We are good at cosmetics in this country. What has happened in Sunderland reminds me vividly of what happened all those years ago. It takes a long time to put matters in order when the economy is breached in this way. We have had a post mortem here today. My hon. Friend the Member for Sunderland, North said that there would be a month's breathing space and a kind offer. I thought that, although we had had a post mortem, there would be no need for a requiem mass, but we might as well have a requiem mass. Nothing has come out of the House today apart from a factual account of the position and some


palliatives from a few Conservative Members who feel good because the Secretary of State has offered £45 million to create new job opportunities. The hon. Member for Tynemouth should know better.
We have been shifting regional policies year after year, until many of our people are immune to those palliatives. It is time that politicians did something to find out how people really feel, instead of talking to the chairmen of development corporations, good as they are, and feeling satisfied because the economic indicators are looking a little better. We should put ourselves in the position of a shipyard worker listening to the director of a development company saying that the economy is becoming buoyant. That is not true in this case.
This might have been a useful debate, but, unfortunately, it will achieve nothing. However, I hope that there will be sufficient press coverage to show that the Government have once again done a spot of professional cheating.

Mr. Phillip Oppenheim: Almost everyone must have a great deal of sympathy for the people of Sunderland because of the number of jobs that they will lose. [Interruption.]It is all very well for Opposition Members to sneer at that, but no Conservative Members takes any comfort or pleasure from the fact that jobs will be lost, although we are not so blinkered as to claim that those jobs have been lost as a result of Government actions or policies.
Opposition Members have accused us of murdering Sunderland and the yard. In truth, the yard was murdered many years ago. It is worth looking briefly at the history of shipbuilding to put the matter in perspective and to learn some lessons for the future. We began shipbuilding in Britain with many natural advantages—abundant rivers and estuaries, demand from the largest merchant marine in the world, resources of iron and steel and, many years ago, the finest engineering industry in the world.
However, as long ago as the late 19th century, virtually no new shipbuilding capacity was laid in, and by the turn of the century our shipyards had already become unsuitable for the larger steel ships that were being built. By the beginning of the first world war, our yards were already far less modern than those of the United States and Germany. In addition, they were riddled with labour problems. In 1914, at the outbreak of the first world war, there were no fewer than 90 demarcated skills in British yards. In writing about the time, one historian stated:
The engineers quarrelled with the boilermakers, shipwrights and joiners, brassworkers and tinplate workers; the boilermakers with the shipwrights, smiths, chippers and drillers; the shipwrights with the caulkers, boat and barge builders, mast and blockmakers, and joiners and the joiners with the mill-sawyers, patternmakers, cabinet makers, upholsterers and French polishers. On the Tyne there was an average of one major strike per month over questions of demarcation".
That was the position at the turn of the century.
Apart from labour problems, we were falling behind in education and skills. In 1907, Britain had one full-time student of naval architecture per 16,000 tonnes of ship produced. In Germany, there was one per 100 tonnes. It is no surprise that our share of world tonnage shrunk from 60 per cent. in 1913 to just over 30 per cent. by the

outbreak of world war two. The labour situation had not improved one jot by the outbreak of the second world war. Even Ernest Bevin noted in a letter in 1942
how difficult and backward the shipbuilding industry has been from a labour point of view … Everything that has been done has almost had to be forced upon them.
Even under the threat of Hitler, the Amalgamated Engineering Union and the Boilermakers Society refused to allow men of the National Union of Railway men—the electricians trade union similarly prevented non-union electricians—to work in yards to remedy skill shortages. There were numerous inter-union demarcation strikes during the second world war, but union attitudes alone were not to be blamed. There was a legacy of bitterness, poor management and poor education, and these factors were also partly to blame.
Attitudes that were ingrained over many years made investment in the yards harder to secure, and the shipbuilding industry has suffered ever since from a lack of investment. It is one of the many factors that allowed far eastern competition to overtake us in the 1950s. Even during the second world war, the Germans were using 20-tonne cranes, whereas in our yards the norm was a 3 to 5 tonner. When one-man pneumatic riveting was introduced in the early 1940s, the unions insisted on a riveter's mate being put by every riveter. The mate just stood and watched the job being done.
Since the breathing space after the war, when every other country's shipbuilding industry was flat on its back, there has been further, continual and sorry decline. By 1954, German ship exports had passed the United Kingdom total. A year later, the Japanese had overtaken us. In the 1980s, conditions are harder than ever before. Even the Japanese, with all their efficiency, management, fine education and natural advantages, are now beginning to lay men off and to close yards. The huge Mitsubishi yards at Nagasaki are now only partially operational. Even the South Koreans, with their advantages of cheap labour and discipline, have severe problems in the shipbuilding industry.
The answer to the problem is not to keep pouring money into an industry which, sadly, was overtaken many decades ago. We cannot make a living on past glory. The more money that we put into declining and unprofitable industries, the more jobs we cause to be lost elsewhere in our economy. There is no future in that.
It is nonsense for Opposition spokesmen to talk of the Government's lack of concern about the nation's indutrial base. It is worth reminding them that, when the Labour Government were in office, shipyards were closed and many jobs were lost in the shipyards and ship repair yards. Indeed, during that period our manufacturing output shrunk, whereas under the present Government manufacturing output has risen. It has done so extremely rapidly since the trough of world recession in 1981.
If we are to have an industrial policy, we must examine what the Japanese have done, so that we understand why they have succeeded. Over the past 50 years, the Japanese have had a consistent policy of allowing old and relatively low-tech, labour-intensive, low added-value industries to decline. They have not attempted to subsidise them. Instead they have invested in productive capacity in newer and higher added-value industries. They have left the older and more labour-intensive industries to countries that are best able to cope with them, such as South Korea and China.


That is what we must do. We must not keep old and dying industries alive, however painful it might be to do otherwise. We must concentrate our investment on newer, less labour-intensive and higher value-added industries. That is what we must do to help the people of Sunderland. It may have been the short-term political option to keep the yards open. It may have appeared kind, and it would have been the easier decision to make. I believe, however, that it would have been a disastrous decision in the long term for the region and for the national economy.

Mr. Chris Mullin: I share the widespread view that the decision to close the yards was made some months ago, and that since then nothing has been allowed to get in its way. I believe that it was taken before the Minister took office. I recall an article that appeared in The Guardian during March—I think that it was the front page lead—that quoted apparently well-informed sources as saying categorically that the Government proposed to wind up British Shipbuilders.
I join my hon. Friend the Member for Sunderland, North (Mr. Clay) in paying tribute to those who have participated in the campaign over the past eight months to keep the yards open, especially the people of Sunderland. They have been supported by the Sunderland borough council, people of all political opinions and the work force. The shop stewards and others have led a magnificent campaign. I pay tribute to my hon. Friend the Member for Sunderland, North, who has been outstanding. His speech reflected his inspirational leadership on this issue.
When the Minister replies, I hope that he will respond seriously to the proposal of my hon. Friend the Member for Sunderland, North that at least one part of North East Shipbuilders Ltd. should be saved. I understand that the Cubans are returning next week and one must admire the persistence and generosity of their approach. After all the rebuffs, they are still interested in placing orders with NESL, or what remains of it. I hope that the Minister will assure us that any proposals that the Cubans have to make will be taken much more seriously than the ones that have so far been put before the Government.
It has been said that Cuba is a Communist country. I do not know what that has to do with the matter. I should like to know the terms of the order from the Chinese that was received at Govan for the COSCO ships, such as the length of credit and the interest rates. It would be interesting to match the terms of that order with what may be offered in reponse to a Cuban order.
The upturn in shipping has been referred to with various degrees of scepticism by Ministers over a long period. We need look no further than today's Lloyd's List,a newspaper which must be taken to know something about the shipbuilding industry. The first sentence of the leading article reads:
With new building prices hardening and secondhand prices for most types of ship escalating appreciably, there is real confidence that the ship, at long last, is set to acquire something of a scarcity value which it has not enjoyed for 15 years.
Those at Lloyd's List probably know a great deal more than those at the Department of Trade and Industry about the future of the industry.
I would not like the House, including Ministers, to be under the illusion that indignation at what has been done to Sunderland is confined merely to the Government's political opponents. Last week, after the ministerial announcement that NESL would be closed, the leader of the Conservative group on Sunderland borough council said:
They have done at a stroke what the Germans for six years tried to do. It is industrial sabotage.
He added:
I think the decision was taken nine months ago by Lord Young.
I should also like to quote from the Sunderland Echo, the owners of which gave £2,500 to the Conservative party last year and, therefore, must be considered to be reasonably impartial on this issue. The Sunderland Echo described the Minister's statement last week as
misguided, short-sighted and cruel … A self-inflicted and disabling wound to a maritime country which has deliberately enfeebled a strategic industry.
I do not know whether the owners of the Sunderland Echo will make a donation to the Conservative party next year, but I pay tribute to their support for the campaign to save the shipyard.
I want the Minister also to understand the reason for the great anger that the decision has generated. The anger is not irrational, contrived or founded solely on the basis of emotion. The shipyard workers of Sunderland are not daft. They know as well as anyone that if there is no work, yards will have to close. However, as has already been made clear, there was and there is work. Reference has been made repeatedly to the Cuban order, which is worth around £110 million. I acknowledge again the extraordinary patience of the Cubans, who must be, as I am, bewildered by the fact that, in a world where shipyards are crying out for orders, they cannot find anyone to take their very large order seriously. That order is one of the largest on offer anywhere in the world.
The past eight months have been wasted looking for an owner for North East Shipbuilders. That time should have been spent looking for orders. Orders are available, and other western European yards have obtained them. Last April, a large order for a passenger ship worth $150 million was placed at a West German yard. In July and August, orders for tankers and chemical carriers were placed with Spanish yards and, recently, a large order was placed for Soviet cargo ships. I checked with the Department of Education and Science this afternoon and I understand that the Department has invited tenders for an Antarctic survey ship. Why could not that ship be built in Sunderland? That order is within the gift of the Government.
Hon. Members have already compared this privatisation with others. It has become normal for the victim of privatisation to be fattened up through various price increases, as we have seen with electricity, water and other major privatisations. At no stage in their programme of privatisation did the Government choose a moment to put an industry on the market when its fortunes were at the absolute lowest point. However, that happened with North-East Shipbuilders.
Lloyd's List remarked on an alternative only last week:
The United Kingdom Government could at least have admitted that the shipbuilding industry was looking rather better in the medium term and financed the Cuban order to tide the yard over until rather more commercial orders came along.


It could have given the yard another couple of years in the public sector, with the knowledge that the security this would provide could have encouraged work, for assuredly no owner"—
this is surely the key point—
is going to place an order in a yard which is under threat of immediate closure.
The background against which this disaster has been inflicted on Sunderland is that our merchant fleet is being allowed to disappear in the face of repeated warnings from every responsible source, including the Select Committees on Defence and on Transport, within the past year. The United Kingdom fleet in 1980 contained 1,275 ships or 42·3 million tonnes and, by 1986, the latest year for which I have seen figures, the fleet was down to 545 ships or 11·2 million tonnes. The percentage of world tonnage under the British flag in 1980 was 6·4 per cent. It is now down to 1·8 per cent. Half the fleet that sailed to the Falklands now sails under foreign flags. The Select Committee on Transport stated that our ships are older and more in need of replacement than those of our chief rivals.
The problem is wider than just the future of British shipbuilders or North East Shipbuilders. The problem is that the Government have no maritime policy. We are an island nation, dependent for our survival on trade, but we cannot own or build our own ships. Surely it is not beyond the wit of Government to devise a policy, even at this late stage, to salvage what remains of our capacity.
I want to quote, not from an Opposition Member, but from a former Conservative Member, Sir Edward du Cann. Two years ago, in a debate on the future of the shipbuilding industry he said—

The Parliamentary Under-Secretary of State for Industry (Mr. Robert Atkins): We have heard it before.

Mr. Mullin: Yes, I know that the Minister has heard it before, but it is rather apposite. Sir Edward du Cann was right. He said:
During my time in the House I have watched the decline of many manufacturing industries and the extinction of others—motorcycles, television, radio, optical instruments, motor cars and so on. Too many have declined and too many have gone. We choose fancy words to describe the process—and rationalisation is one. To me, it has been a history of industrial disaster … Future generations will never forgive us if we do not say that this process of attrition in British manufacturing industry has gone far enough. It is time to cry halt."—[Official Report, 21 May 1986; Vol. 898, c. 422.]
That is what Sir Edward du Cann said about shipbuilding two years ago. How right he was.
In his aid package announced last week for Sunderland, the Minister offered £45 million over 10 years or so. That money would have been better spent subsidising a new order. That would have cost less and preserved, or created, more jobs. I also invite the Minister to compare the £45 million on offer with the £155 million that has been taken away from Sunderland over the past decade in lost rate support grant. That is equivalent to virtually the total budget of Sunderland for one year. That is not a source of amusement, although the Minister may find it so.
This is a disaster for Sunderland, because it takes place in a town that already has some of the highest unemployment in the country. In Sunderland, there are whole streets where virtually no one is working and where a generation of children are growing up who may never work. Some of those made redundant last week have been made redundant three or four times, working their way down the river as each enterprise folds beneath them.
The Minister has before him the last of many positive proposals from my hon. Friend the Member for Sunderland, North. What will the Minister do about it? Will he take that proposal a lot more seriously than the others that we have heard about tonight? I hope that the Minister will rise to the occasion.

Mr. James Cran: Today's debate has art air of inevitability about it. I was the Confederation of British Industry's northern director in 1979. I was based in Newcastle upon Tyne, and I knew Sunderland extremely well. I was also familiar with the shipyards that we have been discussing this afternoon. I remember members of the work force, the management, people living in Sunderland and in Newcastle and Jarrow asking me, in view of the level of public funds going to shipbuilding support, how long their companies and jobs could survive. There was a level of understanding at the time of the problems facing shipbuilding. It is therefore by no manner or means a new phenomen and no hon. Member could say that the Government had not, with a vengeance, supported the industry. Indeed, some of us believe that the Government have persisted for too long in supporting the industry.
The chairman of British Shipbuilders appeared before the Trade and Industry Select Committee—of which I am a member—in June 1988, and more or less said that, just because the Koreans had lost £2·3 billion in building ships and grabbed a 17 per cent. share of the world market, perforce this country and every other country should follow suit. I thought that an extraordinary argument at the time, and the more that I have thought about it, the more ludicrous it has become. For each country to outdo other countries in providing even larger subsidies and making even larger losses is a bankrupt policy. It is a fool's paradise to suggest that losses within an industrial company or organisation guarantee jobs at the end of the day. They do not. That was understood by the people of the north-east in 1979, and I suspect that it is understood there today.
When the chairman of British Shipbuilders appeared before the Select Committee, I was intrigued by the question whether British Shipbuilders could ever become profitable. One would have thought that the answer would be that it could do so. Other hon. Members have already said that seaborne trade is at a 10-year high and that, the second-hand ship market has virtually disappeared, which indubitably gives opportunities to British Shipbuilders. However, the chairman's answer was:
I believe five or six years down the line we could almost get to break-even or break-even itself subject to the market improving.
In effect, he was saying that we would have to wait until 1994 for the organisation to break even.
I remind the House that this would coincide with demand being at its highest, since demand is rising. Therefore, if the organisation can break even only when demand is at its highest, the fact that it is a cyclical industry makes it difficult to imagine what will happen after 1994 if demand turned down. It is absurd to ask the taxpayer to continue to bear that sort of burden—£2 billion since 1979. I strongly believe that that £2 billion could have been infinitely more wisely spent, not only for the benefit of the people of Sunderland, but for people in other areas.


My constituency is home to a shipbuilding firm, Dunstons of Hessle, which has never received a penny piece of public funds. Yet it is supposed to operate in world markets, it is supposed to win orders, it is supposed to pay weekly salaries to its work force. I can say with some pride that that is exactly what it is doing, and British Shipbuilders should have done the same.

Mr. John Redwood: Does my hon. Friend agree that on many occasions during the past 12 years the shipbuilding industry has forecast an improvement in demand and a reduction in losses, but that often those forecasts have not come true? Should we give any more credence to the current forecast of those two events happening?

Mr. Cran: I could not agree more with my hon. Friend, because that is exactly what has happened in that cyclical industry. Indeed, when upturns did occur, the then management of British Shipbuilders could not take advantage of them because its overheads were far higher than those of most of its competitors. I concede that the current chairman is attempting to deal with that position but, alas, it may be too late. I see that you are looking at me, Madam Deputy Speaker, and I wonder whether you want—

Madam Deputy Speaker (Miss Betty Boothroyd): Order. I am listening to what the hon. Gentleman has to say.

Mr. Cran: I am delighted to hear that, Madam Deputy Speaker. British shipbuilding, in contradistinction to British Shipbuilders, certainly has a future. The United Kingdom should take a certain amount of pride—I certainly do—in the fact that we are in the lead in the restructuring of shipbuilding—[Laughter.] Opposition Members may laugh, but the chairman of British Shipbuilders told the Select Committee:
The Koreans have recognised they bought a 17 per cent. world market share by selling below cost and they have now turned their attention to other industries … they are not interested in subsidising shipbuilding to the extent they have in the past.
The penny has at long last dropped in Korea, just as it has dropped in this country. The resources that we pour into British Shipbuilders could be far better spent in rejuvenating the economies of the regions. I am not prepared to take any lessons from Opposition Members about the need for vibrant regional economies in the United Kingdom. I have operated in the regions all my life and there was not one that I did not wish to leave in better condition than I found it. I am sure that that would be true of every hon. Member. It is instructive to study the figures for economic growth in the regions, because almost every index shows that the northern regions are doing rather better than the southern regions. There is no reason why that should not continue in the north-east, just as it is in Yorkshire and Humberside.
I realise that Opposition Members do not want to hear literate and economic truths, so they will not welcome my next remarks. The Government are taking three steps that will help the economy of the northern region. First, the Chancellor of the Duchy announced a £43 million package

last week, and I pay tribute to him for that. I have taken the trouble to speak to my contacts in the north-east because I did not think it right to speak from hearsay.
In contradistinction to what has been said by some Opposition Members, that package is very much welcomed in the north-east. It recognises the fact that the Government were not prepared to pull the rug from under the north-east and not offer some hope of future economic growth. The Government should be applauded for that. [Interruption.] I have been here throughout the debate, and Opposition Members must listen to what I have to say.
Secondly, I did not hear any Opposition Member mention the Northern Development Company, the body that encourages inward investment. It now receives greater resources than almost any other such body in the English regions. It certainly receives more Government money than my region of Yorkshire and Humberside. I make no complaint about that, because it merits that support in present circumstances. That company is respected by all the other inward investment bodies for its level of success.
The third matter that the Opposition clearly do no want to hear, but will, relates to the Tyne and Wear development corporation. I do not hear much from them on that subject. I wonder how many other hon. Members took the trouble to consult a document that it has produced called, "Forward to 1991". Clearly, not many.
That document is extremely bullish about the future of the north-east, particularly Sunderland. I have three encouraging quotations to give the House. The first states:
We discovered that the area already has a sound economic base"—
the corporation says that, not me or the Government—
with a skilled and adaptable workforce.
Those are exactly the ingredients that will produce the sort of economic success that the north-east and Sunderland in particular need.
Secondly, the document states:
it became clear to us that people do have confidence in the area.
It appears that inward investors have confidence in that region, but Opposition Members have shown precious little confidence and they should be thoroughly ashamed. If I were to speak about my region I would speak with pride and confidence.
I realise that Opposition Members are growing impatient, but the third quote states:
The result of our appraisal is a far more positive picture than we'd expected. And while clearly there are problem areas these are on a limited scale.
There is an inevitability about the debate, but no inevitability that Sunderland need decline in any way, shape or form. If in 10 years' time the figures for any index of economic development in Sunderland are not better than in the past 10 years, I shall regard that as a failure. I do not expect it to happen.

Mr. A. J. Beith: We have had some offensive and patronising comments from Conservative Members. They are patronising towards the north-east, local authorities, trade unions and those who have been involved in the creation of the Northern Development Company. They are patronising to the shipbuilding industry, which has had to face all the turmoil of change and was busily re-equipping itself when this blow hit it, to those in all parties and sections of the


community who have campaigned for Sunderland and its shipyard, and to the hon. Member for Sunderland, North (Mr. Clay) who made such an effective case. I had hoped to see him become a capitalist entrepreneur. That would have had a nice political irony to it. I genuinely wished him success in his bid. The fact that he was prepared to undertake that venture showed that everybody on all sides of the political spectrum set aside their general political views to see what could be done for Sunderland shipyards—everybody, that is, except the Government, who could have set aside some of their political preconceptions.
My great anxiety is that the whole affair has been bungled. It is a sign of Government bungling that there could still be the prospect of realistic progress with the Cuban order, given the possibility of substantial container work alongside shipbuilding work, which would have made use of the Pallion yard in Sunderland as well as shipbuilding yards. When Conservative Members talk about the sums that would have been involved—I presume they are thinking of the intervention fund help for that order—they seem to forget the Government's readiness to offer a substantially larger amount to Mr. Tikkoo for an order to go to the Harland and Wolff yard in Belfast, and in the end that did not work out. We did not hear the same complaints from them then.
We are entitled to ask what is happening on the ferries order. How is it that ferries could be sold to Mr. Johansen, as we believe they have, when that deal could not be completed in preceding months and when no Government action could deal with Mr. Johansen's default? Why do the Government not, at least for the next two years, secure a future for the sites? Given the strategic importance of shipbuilding, it seems absurd for these sites to fall into complete disrepair just when it is recognised that there could be a significant upturn in shipbuilding. Yesterday I listened to Conservative Members explaining that there were strategic reasons for intervening in the market. They were talking about nuclear power. But all of a sudden those arguments are of no consequence because we are talking about merchant shipping and shipbuilding. Today, strategic reasons cannot be allowed to interfere with the operation of the market, according to them.
What has the Minister said to the European Community about the Sunderland yard? Has he taken action to ensure that we do not permanently lose the right to build ships and have intervention funding in Sunderland? As he well knows, that could be the effect. We are entitled to know what he has said to the European Community.
The Minister talks about the success of privatising the rest of British Shipbuilders, but there will not be unbridled enthusiasm in all parts of Sunderland or Dundee at the acceptance of the managing director's bid for Marine Design Consultants. One can only hope that that bid will be successful, but it is viewed with apprehension by many who work for the enterprise in Sunderland and by those engaged in Dundee.
The recovery package which the Government have offered will not be enough, even when set beside the splendid self-help efforts in which the Sunderland people are engaged, including the Wearside opportunity initiative. My right hon. and hon. Friends and I have warmly welcomed Nissan to the Sunderland area and believe that it has been a beneficial enterprise for British industry in general because of the example that it can set British industry. But it would take three Nissans and a

great deal of public funding to make up the shortfall in Sunderland's employment problems. It would take three whole Nissans to solve the problems to which the closure of this shipyard has added so hugely.
Sunderland is a handsome, lively town which has united with great spirit in the fight for the shipyards. That spirit has not been recognised by the Government. They owe Sunderland a tremendous debt. The first way to discharge that debt is to seek, even now, a continued future for some shipbuilding in Sunderland; the second is to offer far more to Sunderland's future than they have done so far.

Mr. Julian Brazier: I am sorry to have missed the hulk of this debate, but I was engaged elsewhere. Many of those present came to the successful parliamentary maritime group session with my right hon. Friend the Chancellor of the Duchy of Lancaster, and I should like to return to many of the points that I know have been raised. I firmly believe that the Government have made the right decision on Sunderland but that nevertheless they must look carefully at their future policy on shipyards and shipping.
I used to work for a company which had more than 50 shipyards worldwide in its client base. I visited several of them, and one where I worked was Swan Hunter shipbuilders in the north-east. The reasons why the shipyards' customers, the shipping companies, have turned down so much do not relate to anything temporary that will disappear overnight or in the next few years, although there may seem to be a glimmer of light on the horizon. In a world of oil pipelines, fewer oil tankers are needed. In a world of containerisation, there are not vast numbers of ships tied up loading and unloading for long periods. The sad fact is that, around the world, there are mothballed and semi-mothballed yards, which will come straight back on stream as soon as the first sign of an upturn is seen, and I admit that there are signs of a temporary upturn. Many of those yards enjoy considerable subsidy, which will ensure that prices remain low.
The Government are right to take the view that it is absurd to say on purely regional grounds that we should keep the shipyard going in those market conditions. They have adopted a sensible attitude towards Sunderland shipbuilders. The substantial sum of £45 million that they have put forward will go a long way towards filling the gap that must be filled with modern competitive industries of the sort on which my hon. Friends have touched so well.
There are, however strategic and military reasons for believing that we must keep a minimum base of shipbuilding, just as we need to keep a minimum strategic base in shipping. We know of the number of ships that we needed in the Falklands crisis, and that other crises may require more ships over a longer period, as well as substantial ship repair, ship conversion and other facilities. For this reason, it is essential that, just as the Government have defined a strategic core for shipping, they define a strategic core for shipbuilding and ship repairs. Inevitably, because of subsidies paid to shipbuilding industries in other countries, such a strategic definition will involve subsidies-although not, I hope, on the scale that we have had. If there is no subsidy, what happened in Sweden, where what were arguably the most efficient shipbuilding companies in Europe disappeared, will happen to the remainder of our shipyards.


The way to apply this core principle may be to look particularly hard at the dual capability naval shipyards, of which Swan Hunter is an example. If the intervention funding available to the small residual core outside the naval sector were to be available to these yards as well, with the baseload of work for the Royal Navy and the Royal Fleet Auxiliary, they would be well placed to survive almost any storm in the market.
In a nutshell, we must strike a balance. There is no point in trying to keep yards going for regional reasons where there is no hope for the future. However, we must keep a small basic core of shipbuilding, just as we must keep a core of shipping. This will mean defining that core and being willing to continue to subsidise it.

Ms. Joyce Quin: When the closure of North East Shipbuilders Ltd. was announced to the House last week, the reactions were emotional and the atmosphere was highly charged. Two emotions predominated—anger and sadness. I share both. There were many reasons for the anger expressed last week, particularly since the statement had been widely leaked in advance, which undermined many of the arguments that we wished to make. There was also anger at the outrageous decision to close a modern yard that had not just the possibility but the probability of a multi-million pound order. We were also angry that the closure seemed to stem simply from the Government's political dogma, and that the Government had been determined to force through change in ownership at the worst possible time, when the negotiations for the Cuban order were taking place. That decision merely added greatly to the delays and uncertainties of the situation.
There was also anger because the Government did not seem to have explored every possibility, and because the EEC made no formal presentation of a rescue bid. Like others, I have been closely linked to the shipyards in Sunderland, in my case because, since 1979, I have represented the area in the European Parliament. When I was first elected, there were some 27,000 shipyard workers in Tyne and Wear. Seven years later there were fewer than 7,000 and today there are fewer than half that number.
Throughout the period of decline, we were told that restructuring was necessary and that we needed a restructured industry that would be slimmed down and capable of competing. In the process, workers, particularly in the Sunderland yards, undertook many sacrifices. There were dramatic changes in working patterns, such as the development of flexible methods of working, and a great deal of modernisation of the yards. Now, we see that all that sacrifice was to no avail. That explains some of the anger and the reactions on Wearside.
Throughout my nine years as a European Member of Parliament, I was keenly aware of the lack of action by the Government and the EEC when they were confronted with the determined and cut-throat competition from the far east. It has not helped that we have had so many different Ministers with responsibility for shipping over this time, or that even in this crucial period, we have had another change of Minister. It has also not helped that in the EEC there has been little in the way of a shipbuilding policy worthy of the name. The only policy has been one of

limiting state aid by the EEC countries to their respective shipyards. That policy has been inadequate to ensure that Britain and Europe survive the years of shipbuilding slump and will be in a position to pick up orders.
The EEC has adopted a negative approach, which has been aided and abetted by our Government. Over the past nine years, there have been few negotiations on shipbuilding between the EEC and Japan and Korea. Although great concern has been expressed about the unfavourable trade balance between the EEC and the trading countries of the far east, shipbuilding has been a low priority in all those discussions. The latest issue of the publication European Report says that, once again,
negotiations led by the European Commission with Japan and South Korea to re-organise the world shipbuilding market have come to a standstill.
That standstill is nothing new, because it has existed for the past nine years, and even more so recently, when such discussion was vital for the future of British shipbuilding industry.
The redundancies and restructuring sacrifices made by those in the EEC shipbuilding industry have been unequally shared out. Recently, the Minister admitted to me in a letter that we had lost more shipbuilding jobs than any other EEC country. Capacity in certain European countries has been reduced much more dramatically than in others, despite the existence of supposedly fair EEC rules. The shipbuilding world is not a chivalrous business. It is dependent on political will and decisions by politicians, just as much as on the efforts of business men. For that reason, we feel that the British Government and the EEC have let us down by not defending the industry and ensuring its future.
Furthermore, the demise of shipbuilding takes place at a time when we have a record balance of payments deficit and when that deficit is dramatic in manufactured goods. What is the Government's response? Simply to close down a superb manufacturing facility in Sunderland and run the shipbuilding industry into the ground. This is a disgraceful record.
Throughout the debate, the Government have suggested various palliatives, or bandages, for the wounds of the shipbuilding industry. I know, from experience in the EEC, of the money that is available there to help the shipbuilding areas, and that would have been available for Wearside and the whole of the north-east simply because of the redundancies that have already taken place. The closure of North East Shipbuilders Ltd. is irrelevant to that. We would have earned a large slice of money to help that area, irrespective of the closure.
Other hon. Members have mentioned the different points of view held in the Government's ranks. There is a clear division between various members and supporters of the Conservative party who are interested in maritime policy and shipbuilding and those who, unfortunately, have been particularly powerful in the Cabinet and who have taken the opposite view. It is a great tragedy that the wrong side has won the argument.
Two or three months ago, I accompanied my hon. Friends the Members for Sunderland, North (Mr. Clay) and for Sunderland, South (Mr. Mullin) for discussions with the Minister's predecessor. On that occasion, we presented him with a book entitled "Sunderland—the Town where Ships are Born". Unfortunately, we did not realise that we were making that presentation to the man who would be responsible for Sunderland becoming


known as the town where shipbuilding died. The Government's decision is disgraceful, and it is one for which they will be blamed for a long time to come—not only in Sunderland and in the north east but throughout the country.

Dr. Norman A. Godman: On a point of order, Mr. Deputy Speaker. As the Minister referred to my constituency on a number of occasions during his opening speech, I wish to know why I have not been called to speak—particularly in view of the fact that
one hon. Member who was called honestly admitted he was not present in the Chamber for most of the debate.

Mr. Deputy Speaker (Sir Paul Dean): I regret that a number of hon. Members wishing to speak have not been called, and that the hon. Member for Greenock and Port Glasgow (Dr. Godman) is among them. I suggest that he might seek to intervene during one of the wind-up speeches.

Mr. John Garrett: We have been discussing an industrial tragedy—a tragedy not only for Sunderland but for every region of the country. It has been a deeply serious debate, with my hon. Friends making their analysis of the causes of North East Shipbuilders' closure and its consequences for their constituencies. In an outstanding speech, my hon. Friend the Member for Sunderland, North (Mr. Clay) asked many important questions of the Minister, particularly in respect of the Cubans' latest proposition, which I hope the right hon. Gentleman will answer.
There is no doubt that the Government contributed to the closure by concentrating on seeking private owners for the yards in pursuit of their privatisation ideology rather than on helping the yard to obtain orders and assuring its production continuity. One of our concerns is the lack of any Government strategy or policy for merchant shipbuilding, other than to get it out of the public sector by any means, as quickly as possible.
In a memorandum submitted on 14 June to the Select Committee on Trade and Industry, British Shipbuilders observed:
We are concerned that there is apparently no policy concerning the merchant shipbuilding industry or indeed the whole maritime infrastructure of the United Kingdom. This is in no way concerned with the question of either public or private ownership.
British Shipbuilders also made the point that shipping policy should be an integral part of national maritime capacity, and clearly it was right to say so. British Shipbuilders' opinion was that merchant shipbuilding worldwide was on the brink of an upturn for the 1990s, as has been said many times during the debate.
In his evidence to the Select Committee, the chairman of British Shipbuilders said that his view of the upturn was based on the fact that seaborne trade was at a 10-year high and on the increase in freight rates. He remarked that a new generation of efficient modern ships is needed to replace much of the present world fleet. The re-equipment of the Sunderland yard placed it in an excellent position to take advantage of an upturn.
On 28 June, the then Chancellor of the Duchy of Lancaster told the Select Committee:
I think there is plainly some improvement in the market, yes … I think I do accept there is a change.

He referred to the scope for replacing aging vessels throughout the world. But now it suits the Government to play down the upturn. When all the signs are right, only then do the Government decide to end merchant shipbuilding in a modern, competitive yard.
Ministers talk of £1·8 billion being sunk into British Shipbuilders, but they know that the cost of merchant shipbuilding was about one third of that total. They maintain that all such subsidies are unacceptable. It is a pity that they do not apply the same economic logic to the farm subsidies that they so generously support.
The Government's decision itself incurs enormous costs. Two thousand jobs will be lost in the yards, and for every job lost there, three will go in sub-contracting and service industries. There is also the indirect multiplier effect of the loss of spending power in the local community. At least one job in retailing banking and services is lost for every two redundancies in manufacturing. Therefore, in an area of 20 per cent. unemployment, one is confronting job losses totalling about 10,000.
I turn to the Government's programmes for creating employment in Sunderland—what the Financial Times called a "palliative package". We know something about enterprise zones because last year the DTI published an evaluation report on them. We know that, in the 23 enterprise zones, most of the jobs created were transfers from their local economies—and that most were transfers from areas of high unemployment. Only 12 per cent. of enterprise zone firms were in high-tech industries, 40 per cent. of the new jobs were unskilled, and the cost was £30,000 per job. More than one quarter of the jobs were in retailing and distribution, and the retailing jobs were created at the expense of local city centres. All that is revealed in the Government's own report.
The last thing that Sunderland's redundant skilled workers need is the building of yet another shopping experience or more low-paid, unprotected jobs in retailing or warehousing. The zone cannot, anyway, be established before next April, and it will be long after that before any new jobs appear. Whatever economic development takes place, it will not use shipyard workers' skills or the equipment that is in the yards.
Over the next three years, about £5 million will be made available to encourage new enterprise in Sunderland. That is a paltry sum. With a balance of payments crisis, and record—and still rising—interest rates, there has hardly ever been such an unpropitious time to start new enterprise. We all know that new firms are acutely sensitive to interest rates. Another £5 million will be made available over three years to assist NESL's present staff to retain and to find new jobs. Retrain for what? From where are the new jobs to come? Will the Government assist local organisations to produce an inventory of available skills and help to find a substantial employer willing to use them? Or will the Government trust to market forces to produce sufficient small firms and new starts to provide employment?
One of the most interesting exchanges in the Select Committee concerned national industrial policy. British Shipbuilders' chairman made the modest proposal that there should be a maritime policy for Britain, encouraging British shipbuilders to have ships built in British yards, and that there be a forum in which maritime interests could discuss such issues with the Government. He said that no such regular forum existed. There is no such forum, there is no such policy, and there is no strategy.


We have instead a series of financial expedients, which The Guardian of 9 December described as "Young's dream come true":
Lord Young, the Trade and Industry Secretary, yesterday saw come true his dream of ending his department's role as sponsor to what he sees as British industry's 'lame ducks' and creating a Department of Enterprise … Closure of the NESL shipbuilders was the last big obstacle to establishing his new-look department.
Other Governments defend their shipbuilding interests, but ours sells them out. The Minister in the other place had no intention of saving the yards. The decision was delayed simply because the Prime Minister was giving support to Polish shipyard workers. The closure was a forgone conclusion, and the Secretary of State was determined to kill off NESL so that he could create his new-look Department of Enterprise—or is it Department of Advertising? I am never sure.
The Government have betrayed thousands of shipyard workers and the national interest in an act of gross incompetence and folly.

Mr. Newton: In view of the closing remarks of the hon. Member for Norwich, South (Mr. Garrett) I must flatly deny that there is any truth in his suggestion that the decision I reluctantly and regretfully announced last week was a forgone conclusion, or that the Prime Minister's visit to Gdansk played the part suggested by the hon. Gentleman and by one of his hon. Friends earlier.
We have been seeking a way forward for the yards within the terms that we set out. In my opening speech, I went to some lengths to describe the various processes through which we went and the various points at which time extensions were allowed to explore further possibilities. I make that absolutely clear. I shall not speak further on that point, because if I do, it will prevent me from replying to points on which hon. Members seek replies.

Dr. Godman: I am grateful to the Minister for showing his characteristic courtesy by giving way to me.
May I point out to the right hon. Gentleman, with regard to his remarks about Clark Kincaid and Ferguson, that the negotiations concerning the buyers at Clark Kincaid are proceeding apace. However, I must say to him, in all seriousness, that the negotiations concerning Ferguson at Port Glasgow are deeply worrying. I have been informed that the shop stewards have been denied a meeting with representatives of the preferred bidders, Ailsa Perth of Troon. If such an impediment has been placed in their way, will the Minister do what he can to bring the two parties together?

Mr. Newton: The hon. Gentleman has put his point fairly. I hope that he will accept from me that this is the first that I have heard about a difficulty of that kind. There have been a number of occasions when, in advance of the naming of a preferred bidder, there has been some controversy about whether it would be appropriate for representatives of the work force to talk to the various possible bidders, but the general understanding has been that any preferred bidder would wish to talk to the work force in whatever way seemed most appropriate. I have certainly not sought to discourage that. I shall not

comment further in my immediate response, but I shall look at the point that the hon. Gentleman has raised on behalf of his constituents and be as helpful as I can—in the spirit in which he raised the question.
The hon. Member for Dagenham (Mr. Gould) asked me a number of questions, which interrelated to a significant extent with points that were made subsequently by the hon. Member for Sunderland, North (Mr. Clay). He asked me whether the closure proposals for NESL had been notified to the European Commission. The answer is yes. To allow an orderly rundown in activity and to make redundancy payments, we have already notified our intention to pay closure aid at NESL, by way of redundancy payments to the work force and assistance with retraining and job creation.
The hon. Member for Dagenham asked me whether the notification was reversible. I am not sure whether "reversible" is the right word, but it would be possible to renotify to the Commission. Several Opposition Members, including the hon. Member for Sunderland, North, made that point. There is one problem on which those hon. Members may care to reflect. The hon. Member for Sunderland, North made a proposal, and I once again pay tribute to the ingenuity with which he has acted on these matters in recent weeks and the tremendous effort he has put in. However, it is not clear to me how far it is a proposal from him which the Cubans are considering, or how far it is a proposal from the Cubans, which is, properly, for British Shipbuilders or the Government to consider. I am advised that no such proposal has been received—which is not to say that the Government would not look at it were it received. I hope that the hon. Gentleman understands what I am saying.
The point I want to make is that the proposal made by the hon. Member for Sunderland, North would itself involve the entire existing work force being made redundant; that is a difficulty on which I want him to reflect. The hon. Member proposed that, after renotification, the work force would be re-employed—he hopes—on some completely new basis to start up the yard again with only one third of the current work force at Sunderland, and that is the best hope that he would hold out.
Manifestly, any process of renotification that called into question the capacity of British Shipbuilders to pay redundancy payments within the terms of the overall notification to the European Community would present considerable difficulties, as the work force at Sunderland would not want to have any question marks raised over the payments that they were expecting in those circumstances. I do not make that point to shoot down the hon. Gentleman's proposal.
The hon. Member for Dagenham asked me to say whether we would negotiate in terms of a proposal on those lines. I should prefer to say that we shall consider any proposition put to us, in the way that I outlined in my statement last week. I said that we had hopes of finding a buyer for Sunderland Forge Services, which employs a significant part of the work force at Sunderland, and that I would ask British Shipbuilders to explore possibilities that appeared to exist in respect of Pallion, rather than Southwick, for a possible use that had connections with shipping—that is, conversions and repair, rather than building. In that same spirit, I will not seek to rule out anything. That would not be in the spirit in which I have been carrying out my responsibilities.


However, I must say that I would not be prepared to run risks with the other disposals that have been notified to the Commission as part of an overall package. I must point out to the hon. Member for Dagenham that they have been notified together simply because it is obviously sensible for the Commission to look at our position in respect of British Shipbuilders as a whole. That does not—I repeat not—in any sense mean that any individual proposal is dependent on any other individual proposal that has been put to the Commission at the same time. I am not prepared to do anything that might jeopardise other disposals, on which we have made such good progress, or the package of measures for Sunderland.
Following any proposition put forward by the hon. Member for Sunderland, North, there would be a large number of redundancies at Sunderland and it would be necessary to take action to ensure new jobs and new enterprise in the town. I should not want to risk that. The hon. Member for Sunderland, North, gave some indication of his proposition in a message to my office yesterday, but in the circumstances in which he has put it forward, I am not in a position to give any undertakings about the future availability of intervention fund aid for several reasons—some of which I have touched on in the past few minutes.
I can say to the hon. Members for Sunderland, North and for Berwick-upon-Tweed (Mr. Beith) that I can and shall do everything possible to ensure that no options are prematurely blocked off—by, for example, the immediate disposal of equipment in the yards—although I cannot give precise undertakings about the length of time. The Tyne and Wear development corporation, for example, is commissioning a study of possible future uses for the yard, for marine or non-marine purposes, and that must be taken into account. I shall certainly ensure—I deliberately choose general terms—that no precipitate action is taken that blocks off a possibility for using the yards in a productive way as part of the general aim of promoting employment in Sunderland. I hope that that general observation will be welcomed.

Mr. Clay: Will the Minister give at least one commitment? Will he say that he has not entirely ruled out renotifying the Commission that there may be a continuation of shipbuilding at Southwick whatever reduction in the intervention fund next year is consequent on that? Will he at least not rule that out entirely?

Mr. Newton: I have used the phrase "rule out" in some of what I have said, but not in the specific terms that the hon. Gentleman has described. I shall not be as specific as the hon. Gentleman has pressed me to be, simply because I am not prepared to run risks with the package, which we are determined to press ahead with for Sunderland as a whole. Nor am I prepared to jeopardise the successful sale of other yards around the country with the good prospects that exist in those places for the future of the work force. It would be irresponsible for me to run such risks in response to the question that the hon. Member for Sunderland, North has asked me.
It has, inescapably, been impossible for me to comment on all the points that have been raised, including many of the detailed complaints made by the hon. Member for Sunderland, North.
Finally. I must say to the hon. Member for Dagenham and other hon. Members that it is quite ludicrous to

suggest that this means the end of merchant shipbuilding—let alone shipbuilding—in this country. There will still be more than 30,000 people employed in shipbuilding. British Shipbuilders accounts for a very small part of shipbuilding employment as a whole. There will remain not only important civil yards, such as Govan, but military yards with substantial merchant shipbuilding capacity. Should demand arise for ships that can be sold at satisfactory prices, we could and would turn towards it. No one—not even the hon. Member for Sunderland, North—has suggested that the whole of shipbuilding employment in Sunderland can be retained. In those circumstances, we shall need new enterprise and new jobs in Sunderland, and that is what we are determined to bring about.

Question put, That the amendment be made:—

The House divided: Ayes 227, Noes 290.

Division No. 16]
[7 pm


AYES


Abbott, Ms Diane
Dixon, Don


Adams, Allen (Paisley N)
Dobson, Frank


Allen, Graham
Doran, Frank


Alton, David
Douglas, Dick


Anderson, Donald
Duffy, A. E. P.


Archer, Rt Hon Peter
Dunnachie, Jimmy


Armstrong, Hilary
Eadie, Alexander


Ashley, Rt Hon Jack
Eastham, Ken


Ashton, Joe
Evans, David (Welwyn Hatf'd)


Banks, Tony (Newham NW)
Ewing, Harry (Falkirk E)


Barnes, Harry (Derbyshire NE)
Ewing, Mrs Margaret (Moray)


Barnes, Mrs Rosie (Greenwich)
Fatchett, Derek


Beckett, Margaret
Faulds, Andrew


Beggs, Roy
Field, Frank (Birkenhead)


Beith, A. J.
Fields, Terry (L'pool B G'n)


Bell, Stuart
Fisher, Mark


Bennett, A. F. (D'nt'n &amp; R'dish)
Flannery, Martin


Bermingham, Gerald
Flynn, Paul


Bidwell, Sydney
Foot, Rt Hon Michael


Blair, Tony
Forsythe, Clifford (Antrim S)


Blunkett, David
Foster, Derek


Boyes, Roland
Foulkes, George


Bradley, Keith
Fraser, John


Bray, Dr Jeremy
Fyfe, Maria


Brown, Gordon (D'mline E)
Galbraith, Sam


Brown, Nicholas (Newcastle E)
Galloway, George


Brown, Ron (Edinburgh Leith)
Garrett, John (Norwich South)


Buchan, Norman
Garrett, Ted (Wallsend)


Buckley, George J.
George, Bruce


Caborn, Richard
Gilbert, Rt Hon Dr John


Callaghan, Jim
Godman, Dr Norman A.


Campbell, Ron (Blyth Valley)
Gordon, Mildred


Canavan, Dennis
Gould, Bryan


Cartwright, John
Graham, Thomas


Clark, Dr David (S Shields)
Grant, Bernie (Tottenham)


Clarke, Tom (Monklands W)
Griffiths, Win (Bridgend)


Clay, Bob
Grocott, Bruce


Clelland, David
Hardy, Peter


Clwyd, Mrs Ann
Hattersley, Rt Hon Roy


Cohen, Harry
Healey, Rt Hon Denis


Cook, Frank (Stockton N)
Heffer, Eric S.


Cook, Robin (Livingston)
Henderson, Doug


Corbett, Robin
Hinchliffe, David


Corbyn, Jeremy
Hogg, N. (C'nauld &amp; Kilsyth)


Cousins, Jim
Holland, Stuart


Cox, Tom
Home Robertson, John


Crowther, Stan
Hood, Jimmy


Cryer, Bob
Howarth, George (Knowsley N)


Cummings, John
Howell, Rt Hon D. (S'heath)


Cunningham, Dr John
Howells, Geraint


Dalyell, Tam
Hoyle, Doug


Darling, Alistair
Hughes, Robert (Aberdeen N)


Davies, Rt Hon Denzil (Llanelli)
Hughes, Roy (Newport E)


Davies, Ron (Caerphilly)
Hughes, Sean (Knowsley S)


Davis, Terry (B'ham Hodge H'l)
Hughes, Simon (Southwark)


Dewar, Donald
Hume, John






Illsley, Eric
Pendry, Tom


Ingram, Adam
Pike, Peter L.


Janner, Greville
Powell, Ray (Ogmore)


Jones, Ieuan (Ynys Môn)
Prescott, John


Jones, Martyn (Clwyd S W)
Primarolo, Dawn


Kaufman, Rt Hon Gerald
Quin, Ms Joyce


Kennedy, Charles
Radice, Giles


Kilfedder, James
Randall, Stuart


Kinnock, Rt Hon Neil
Redmond, Martin


Lambie, David
Rees, Rt Hon Merlyn


Lamond, James
Reid, Dr John


Leadbitter, Ted
Richardson, Jo


Leighton, Ron
Roberts, Allan (Bootle)


Lestor, Joan (Eccles)
Robertson, George


Lewis, Terry
Robinson, Geoffrey


Litherland, Robert
Rooker, Jeff


Livingstone, Ken
Ross, Ernie (Dundee W)


Livsey, Richard
Rowlands, Ted


Lloyd, Tony (Stretford)
Ruddock, Joan


Lofthouse, Geoffrey
Salmond, Alex


Loyden, Eddie
Sedgemore, Brian


McAllion, John
Sheerman, Barry


McAvoy, Thomas
Sheldon, Rt Hon Robert


Macdonald, Calum A.
Shore, Rt Hon Peter


McFall, John
Short, Clare


McKay, Allen (Barnsley West)
Skinner, Dennis


McKelvey, William
Smith, C. (Isl'ton &amp; F'bury)


McLeish, Henry
Snape, Peter


McNamara, Kevin
Soley, Clive


McTaggart, Bob
Spearing, Nigel


McWilliam, John
Steinberg, Gerry


Madden, Max
Stott, Roger


Maginnis, Ken
Strang, Gavin


Mahon, Mrs Alice
Straw, Jack


Marek, Dr John
Taylor, Mrs Ann (Dewsbury)


Marshall, David (Shettleston)
Thomas, Dr Dafydd Elis


Marshall, Jim (Leicester S)
Thompson, Jack (Wansbeck)


Martin, Michael J. (Springburn)
Turner, Dennis


Martlew, Eric
Vaz, Keith


Maxton, John
Walker, A. Cecil (Belfast N)


Meale, Alan
Wall, Pat


Michael, Alun
Wallace, James


Michie, Bill (Sheffield Heeley)
Walley, Joan


Michie, Mrs Ray (Arg'l &amp; Bute)
Wardell, Gareth (Gower)


Mitchell, Austin (G't Grimsby)
Wareing, Robert N.


Molyneaux, Rt Hon James
Welsh, Michael (Doncaster N)


Moonie, Dr Lewis
Wigley, Dafydd


Morgan, Rhodri
Williams, Rt Hon Alan


Morley, Elliott
Williams, Alan W. (Carm'then)


Morris, Rt Hon A. (W'shawe)
Wilson, Brian


Morris, Rt Hon J. (Aberavon)
Winnick, David


Mowlam, Marjorie
Wise, Mrs Audrey


Mullin, Chris
Worthington, Tony


Murphy, Paul
Wray, Jimmy


Nellist, Dave
Young, David (Bolton SE)


Oakes, Rt Hon Gordon



O'Brien, William
Tellers for the Ayes:


O'Neill, Martin
Mr. Frank Haynes and


Orme, Rt Hon Stanley
Mrs. Llin Golding.


Patchett, Terry





NOES


Adley, Robert
Beaumont-Dark, Anthony


Aitken, Jonathan
Bellingham, Henry


Alexander, Richard
Bendall, Vivian


Alison, Rt Hon Michael
Bennett, Nicholas (Pembroke)


Allason, Rupert
Benyon, W.


Amess, David
Bevan, David Gilroy


Amos, Alan
Biffen, Rt Hon John


Arbuthnot, James
Body, Sir Richard


Arnold, Jacques (Gravesham)
Bonsor, Sir Nicholas


Arnold, Tom (Hazal Grove)
Boscawen, Hon Robert


Ashby, David
Bowden, A (Brighton K'pto'n)


Aspinwall, Jack
Bowden, Gerald (Dulwich)


Atkins, Robert
Bowis, John


Atkinson, David
Boyson, Rt Hon Dr Sir Rhodes


Baker, Nicholas (Dorset N)
Brandon-Bravo, Martin


Baldry, Tony
Brazier, Julian


Banks, Robert (Harrogate)
Bright, Graham


Batiste, Spencer
Brown, Michael (Brigg &amp; Cl't's)





Bruce, Ian (Dorset South)
Hanley, Jeremy


Buck, Sir Antony
Hannam, John


Budgen, Nicholas
Hargreaves, A. (B'ham H'll Gr')


Burt, Alistair
Hargreaves, Ken (Hyndburn)


Butcher, John
Harris, David


Butler, Chris
Haselhurst, Alan


Butterfill, John
Hawkins, Christopher


Carlisle, John, (Luton N)
Hayes, Jerry


Carlisle, Kenneth (Lincoln)
Hayhoe, Rt Hon Sir Barney


Carrington, Matthew
Hayward, Robert


Carttiss, Michael
Heathcoat-Amory, David


Cash, William
Heddle, John


Chalker, Rt Hon Mrs Lynda
Hicks, Mrs Maureen (Wolv' NE)


Channon, Rt Hon Paul
Hicks, Robert (Cornwall SE)


Chapman, Sydney
Higgins, Rt Hon Terence L.


Chope, Christopher
Hill, James


Churchill, Mr
Hind, Kenneth


Clark, Hon Alan (Plym'th'S'n)
Hogg, Hon Douglas (Gr'th'm)


Clark, Dr Michael (Rochford)
Holt, Richard


Clark, Sir W. (Croydon S)
Hordern, Sir Peter


Clarke, Rt Hon K. (Rushcliffe)
Howarth, Alan (Strat'd-on-A)


Colvin, Michael
Howarth, G. (Cannock &amp; B'wd)


Conway, Derek
Howell, Rt Hon David (G'dford)


Coombs, Anthony (Wyre F'rest)
Howell, Ralph (North Norfolk)


Coombs, Simon (Swindon)
Hughes, Robert G. (Harrow W)


Cope, Rt Hon John
Hunt, David (Wirral W)


Cormack, Patrick
Hunt, John (Ravensbourne)


Couchman, James
Hunter, Andrew


Cran, James
Irvine, Michael


Critchley, Julian
Irving, Charles


Davies, Q. (Stamf'd &amp; Spald'g)
Jack, Michael


Davis, David (Boothferry)
Jackson, Robert


Day, Stephen
Janman, Tim


Devlin, Tim
Jessel, Toby


Dickens, Geoffrey
Johnson Smith, Sir Geoffrey


Dicks, Terry
Jones, Gwilym (Cardiff N)


Dorrell, Stephen
Jones, Robert B (Herts W)


Douglas-Hamilton, Lord James
Jopling, Rt Hon Michael


Dover, Den
Key, Robert


Durant, Tony
King, Roger (B'ham N'thfield)


Dykes, Hugh
Kirkhope, Timothy


Emery, Sir Peter
Knapman, Roger


Evans, David (Welwyn Hatf'd)
Knight, Greg (Derby North)


Evennett, David
Knight, Dame Jill (Edgbaston)


Fallon, Michael
Knowles, Michael


Favell, Tony
Knox, David


Fenner, Dame Peggy
Lang, Ian


Field, Barry (Isle of Wight)
Latham, Michael


Finsberg, Sir Geoffrey
Lawrence, Ivan


Fishburn, John Dudley
Lee, John (Pendle)


Fookes, Miss Janet
Leigh, Edward (Gainsbor'gh)


Forman, Nigel
Lennox-Boyd, Hon Mark


Forsyth, Michael (Stirling)
Lightbown, David


Forth, Eric
Lilley, Peter


Fox, Sir Marcus
Lord, Michael


Freeman, Roger
Luce, Rt Hon Richard


French, Douglas
Lyell, Sir Nicholas


Fry, Peter
McCrindle, Robert


Gardiner, George
Macfarlane, Sir Neil


Garel-Jones, Tristan
MacKay, Andrew (E Berkshire)


Gill, Christopher
Maclean, David


Gilmour, Rt Hon Sir Ian
McLoughlin, Patrick


Glyn, Dr Alan
McNair-Wilson, Sir Michael


Goodhart, Sir Philip
McNair-Wilson, P. (New Forest)


Goodlad, Alastair
Madel, David


Goodson-Wickes, Dr Charles
Major, Rt Hon John


Gorman, Mrs Teresa
Malins, Humfrey


Gow, Ian
Mans, Keith


Gower, Sir Raymond
Maples, John


Grant, Sir Anthony (CambsSW)
Marland, Paul


Greenway, Harry (Ealing N)
Marlow, Tony


Gregory, Conal
Marshall, Micheal (Arundel)


Griffiths Sir Eldon (Bury St E')
Martin, David (Portsmouth S)


Griffiths, Peter (Portsmouth N)
Mates, Michael


Grist, Ian
Maude, Hon Francis


Grylls, Michael
Mawhinney, Dr Brian


Gummer, Rt Hon John Selwyn
Maxwell-Hyslop, Robin


Hamilton, Hon Archie (Epsom)
Mayhew, Rt Hon Sir Patrick


Hamilton, Neil (Tatton)
Meyer, Sir Anthony


Hampson, Dr Keith
Miller, Sir Hal






Mitchell, Andrew (Gedling)
Shepherd, Colin (Hereford)


Moate, Roger
Shepherd, Richard (Aldridge)


Monro, Sir Hector
Shersby, Michael


Montgomery, Sir Fergus
Sims, Roger


Moore, Rt Hon John
Skeet, Sir Trevor


Morris, M (N'hampton S)
Smith, Sir Dudley (Warwick)


Morrison, Sir Charles
Smith, Tim (Beaconsfield)


Morrison, Rt Hon P (Chester)
Speller, Tony


Moss, Malcolm
Spicer, Sir Jim (Dorset W)


Moynihan, Hon Colin
Spicer, Michael (S Worcs)


Mudd, David
Squire, Robin


Neale, Gerrard
Stanbrook, Ivor


Nelson, Anthony
Steen, Anthony


Neubert, Michael
Stern, Michael


Newton, Rt Hon Tony
Stevens, Lewis


Nicholls, Patrick
Stewart, Allan (Eastwood)


Nicholson, David (Taunton)
Stewart, Andy (Sherwood)


Nicholson, Emma (Devon West)
Stokes, Sir John


Onslow, Rt Hon Cranley
Stradling Thomas, Sir John


Oppenheim, Phillip
Tapsell, Sir Peter


Page, Richard
Tebbit, Rt Hon Norman


Paice, James
Temple-Morris, Peter


Patnick, Irvine
Thatcher, Rt Hon Margaret


Patten, John (Oxford W)
Thompson, D. (Calder Valley)


Pattie, Rt Hon Sir Geoffrey
Thorne, Neil


Peacock, Mrs Elizabeth
Thurnham, Peter


Porter, Barry (Wirral S)
Townend, John (Bridlington)


Porter, David(Waveney)
Townsend, Cyril D. (B'heath)


Portillo, Michael
Trotter, Neville


Powell, William (Corby)
Waddington, Rt Hon David


Price, Sir David
Wakeham, Rt Hon John


Raffan, Keith
Walker, Bill (T'side North)


Rathbone Tim
Waller, Gary


Redwood, John
Walters, Sir Dennis


Renton, Tim
Ward, John


Rhodes James, Robert
Warren, Kenneth


Riddick, Graham
Watts, John


Ridsdale, Sir Julian
Wells, Bowen


Rifkind, Rt Hon Malcolm
Wheeler, John


Roberts, Wyn (Conwy)
Widdecombe, Ann


Roe, Mrs Marion
Wiggin, Jerry


Rost, Peter
Wilkinson, John


Rumbold, Mrs Angela
Wood, Timothy


Sayeed, Jonathan
Woodcock, Mike


Scott, Nicholas
Yeo, Tim


Shaw, David (Dover)



Shaw, Sir Giles (Pudsey)
Tellers for the Noes:


Shaw, Sir Michael (Scarb')
Mr. John M. Taylor and


Shephard, Mrs G. (Norfolk SW)
Mr. Tom Sackville.

Question accordingly negatived.

It being after Seven o'clock, MR. DEPUTY SPEAKER put the main Question, pursuant to order [9 December]:

The House divided: Ayes 281, Noes 223.

Division No. 17]
[7.14 pm


AYES


Adley, Robert
Benyon, W.


Aitken, Jonathan
Bevan, David Gilroy


Alexander. Richard
Biffen, Rt Hon John


Alison, Rt Hon Michael
Bonsor, Sir Nicholas


Allason, Rupert
Boscawen, Hon Robert


Amess, David
Bowden, A (Brighton K'pto'n)


Amos, Alan
Bowden, Gerald (Dulwich)


Arbuthnot, James
Boyson, Rt Hon Dr Sir Rhodes


Arnold, Jacques (Gravesham)
Brandon-Bravo, Martin


Arnold, Tom (Hazel Grove)
Brazier, Julian


Ashby, David
Bright, Graham


Aspinwall, Jack
Brown, Michael (Brigg &amp; Cl't's)


Atkins, Robert
Bruce, Ian (Dorset South)


Atkinson, David
Buck, Sir Antony


Baker, Nicholas (Dorset N)
Budgen, Nicholas


Baldry, Tony
Burt, Alistair


Banks, Robert (Harrogate)
Butcher, John


Batiste, Spencer
Butler, Chris


Beaumont-Dark, Anthony
Butterfill, John


Bellingham, Henry
Carlisle, John, (Luton N)


Bendall, Vivian
Carlisle, Kenneth (Lincoln)


Bennett, Nicholas (Pembroke)
Carrington, Matthew





Carttiss, Michael
Hicks, Robert (Cornwall SE)


Cash, William
Higgins, Rt Hon Terence L.


Chalker, Rt Hon Mrs Lynda
Hill, James


Channon, Rt Hon Paul
Hind, Kenneth


Chapman, Sydney
Hogg, Hon Douglas (Gr'th'm)


Chope, Christopher
Holt, Richard


Clark, Hon Alan (Plym'th S'n)
Hordern, Sir Peter


Clark, Dr Michael (Rochford)
Howarth, Alan (Strat'd-on-A)


Clark, Sir W. (Croydon S)
Howarth, G. (Cannock &amp; B'wd)


Clarke, Rt Hon K. (Rushcliffe)
Howell, Rt Hon David (G'dford)


Colvin, Michael
Howell, Ralph (North Norfolk)


Conway, Derek
Hughes, Robert G. (Harrow W)


Coombs, Anthony (Wyre F'rest)
Hunt, David (Wirral W)


Coombs, Simon (Swindon)
Hunt, John (Ravensbourne)


Cope, Rt Hon John
Hunter, Andrew


Cormack, Patrick
Irvine, Michael


Couchman, James
Irving, Charles


Cran, James
Jack, Michael


Critchley, Julian
Jackson, Robert


Davies, Q. (Stamf'd &amp; Spald'g)
Janman, Tim


Davis, David (Boothferry)
Jessel, Toby


Day, Stephen
Johnson Smith, Sir Geoffrey


Devlin, Tim
Jones, Gwilym (Cardiff N)


Dickens, Geoffrey
Jones, Robert B (Herts W)


Dicks, Terry
Jopling, Rt Hon Michael


Douglas-Hamilton, Lord James
Key, Robert


Dover, Den
King, Roger (B'ham N'thfield)


Durant, Tony
Kirkhope, Timothy


Dykes, Hugh
Knapman, Roger


Emery, Sir Peter
Knight, Greg (Derby North)


Evans, David (Welwyn Hatf'd)
Knight, Dame Jill (Edgbaston)


Evennett, David
Knowles, Michael


Fallon, Michael
Knox, David


Favell, Tony
Lang, Ian


Fenner, Dame Peggy
Latham, Michael


Field, Barry (Isle of Wight)
Lawrence, Ivan


Finsberg, Sir Geoffrey
Lee, John (Pendle)


Fishburn, John Dudley
Leigh, Edward (Gainsbor'gh)


Fookes, Miss Janet
Lennox-Boyd, Hon Mark


Forman, Nigel
Lightbown, David


Forsyth, Michael (Stirling)
Lilley, Peter


Forth, Eric
Lloyd, Michael


Fox, Sir Marcus
Lord, Michael


Freeman, Roger
Luce, Rt Hon Richard


French, Douglas
Lyell, Sir Nicholas


Fry, Peter
MaCrindle, Robert


Gardiner, George
Macfarlane, Sir Neil


Garel-Jones, Tristan
Mackey, Andrew (E Berkshire)


Gill, Christopher
McLoughlin, Patrick


Gilmour, Rt Hon Sir Ian
McNair-Wilson, Sir Michael


Glyn, Dr Alan
McNair-Wilson, P. (New Forest)


Goodhart, Sir Philip
Madel, David


Goodlad, Alastair
Major, Rt Hon John


Goodson-Wickes, Dr Charles
Malins, Humfrey


Gorman, Mrs Teresa
Mans, Keith


Gow, Ian
Maples, John


Gower, Sir Raymond
Marland, Paul


Grant, Sir Anthony (CambsSW)
Marlow, Tony


Greenway, Harry (Ealing N)
Marshall, Michael (Arundel)


Greenway, John (Ryedale)
Martin, David (Portsmouth S)


Gregory, Conal
Mates, Michael


Griffiths, Sir Eldon (Bury St E')
Maude, Hon Francis


Griffiths, Peter (Portsmouth N)
Mawhinney, Dr Brian


Grist, Ian
Maxwell-Hyslop, Robin


Gummer, Rt Hon John Selwyn
Mayhew, Rt Hon Sir Patrick


Hamilton, Hon Archie (Epsom)
Meyer, Sir Anthony


Hamilton, Neil (Tatton)
Miller, Sir Hal


Hampson, Dr Keith
Mitchell, Andrew (Gedling)


Hanley, Jeremy
Moate, Roger


Hannam, John
Monro, Sir Hector


Hargreaves, A. (B'ham H'll Gr')
Montgomery, Sir Fergus


Hargreaves, Ken (Hyndburn)
Moore, Rt Hon John


Harris, David
Morris, M (N'hampton S)


Haselhurst, Alan
Morrison, Sir Charles


Hawkins, Christopher
Morrison, Rt Hon P (Chester)


Hayes, Jerry
Moss, Malcolm


Hayhoe, Rt Hon Sir Barney
Moynihan, Hon Colin


Hayward, Robert
Mudd, David


Heathcoat-Amory, David
Neale, Gerrard


Hicks, Mrs Maureen (Wolv' NE)
Nelson, Anthony






Neubert, Michael
Skeet, Sir Trevor


Newton, Rt Hon Tony
Smith, Sir Dudley (Warwick)


Nicholls, Patrick
Smith, Tim (Beaconsfield)


Nicholson, David (Taunton)
Speller, Tony


Nicholson, Emma (Devon West)
Spicer, Sir Jim (Dorset W)


Onslow, Rt Hon Cranley
Spicer, Michael (S Worcs)


Oppenheim, Phillip
Squire, Robin


Page, Richard
Stanbrook, Ivor


Paice, James
Stern, Michael


Patnick, Irvine
Stevens, Lewis


Patten, John (Oxford W)
Stewart, Allan (Eastwood)


Pattie, Rt Hon Sir Geoffrey
Stokes, Sir John


Peacock, Mrs Elizabeth
Stradling Thomas, Sir John


Porter, Barry (Wirral S)
Tapsell, Sir Peter


Porter, David (Waveney)
Taylor, John M (Solihull)


Portillo, Michael
Tebbit, Rt Hon Norman


Powell, William (Corby)
Temple-Morris, Peter


Price, Sir David
Thatcher, Rt Hon Margaret


Raffan, Keith
Thorne, Neil


Rathbone, Tim
Thurnham, Peter


Redwood, John
Townend, John (Bridlington)


Renton, Tim
Townsend, Cyril D. (B'heath)


Rhodes James, Robert
Trotter, Neville


Riddick, Graham
Waddington, Rt Hon David


Ridsdale, Sir Julian
Wakeham, Rt Hon John


Rifkind, Rt Hon Malcolm
Walker, Bill (T'side North)


Roberts, Wyn (Conwy)
Waller, Gary


Roe, Mrs Marion
Walters, Sir Dennis


Rost, Peter
Warren, Kenneth


Rumbold, Mrs Angela
Wells, Bowen


Sackville, Hon Tom
Wheeler, John


Sayeed, Jonathan
Widdecombe, Ann


Scott, Nicholas
Wiggin, Jerry


Shaw, David (Dover)
Wood, Timothy


Shaw, Sir Giles (Pudsey)
Woodcock, Mike


Shaw, Sir Michael (Scarb')
Yeo, Tim


Shephard, Mrs G. (Norfolk SW)



Shepherd, Colin (Hereford)
Tellers for the Ayes:


Shepherd, Richard (Aldridge)
Mr. Stephen Dorrell and


Shersby, Michael
Mr. David Maclean.


Sims, Roger





NOES


Abbott, Ms Diane
Clelland, David


Adams, Allen (Paisley N)
Clwyd, Mrs Ann


Allen, Graham
Cohen, Harry


Alton, David
Cook, Frank (Stockton N)


Anderson, Donald
Cook, Robin (Livingston)


Archer, Rt Hon Peter
Corbett, Robin


Armstrong, Hilary
Corbyn, Jeremy


Ashley, Rt Hon Jack
Cousins, Jim


Ashton, Joe
Crowther, Stan


Banks, Tony (Newham NW)
Cryer, Bob


Barnes, Harry (Derbyshire NE)
Cummings, John


Barnes, Mrs Rosie (Greenwich)
Cunningham, Dr John


Beckett, Margaret
Dalyell, Tam


Beggs, Roy
Darling, Alistair


Beith, A. J.
Davies, Rt Hon Denzil (Llanelli)


Bell, Stuart
Davies, Ron (Caerphilly)


Bennett, A. F. (D'nt'n &amp; R'dish)
Davis, Terry (B'ham Hodge H'l)


Bermingham, Gerald
Dewar, Donald


Bidwell, Sydney
Dixon, Don


Blair, Tony
Dobson, Frank


Blunkett, David
Doran, Frank


Boyes, Roland
Douglas, Dick


Bradley, Keith
Duffy, A. E. P.


Bray, Dr Jeremy
Dunnachie, Jimmy


Brown, Gordon (D'mline E)
Eadie, Alexander


Brown, Nicholas (Newcastle E)
Eastham, Ken


Brown, Ron (Edinburgh Leith)
Evans, John (St Helens N)


Buchan, Norman
Ewing, Harry (Falkirk E)


Buckley, George J.
Ewing, Mrs Margaret (Moray)


Caborn, Richard
Fatchett, Derek


Callaghan, Jim
Fields, Terry (L'pool B G'n)


Campbell, Ron (Blyth Valley)
Fisher, Mark


Canavan, Dennis
Flannery, Martin


Cartwright, John
Flynn, Paul


Clark, Dr David (S Shields)
Foot, Rt Hon Michael


Clarke, Tom (Monklands W)
Forsythe, Clifford (Antrim S)


Clay, Bob
Foster, Derek





Foulkes, George
Michie, Mrs Ray (Arg'l &amp; Bute)


Fraser, John
Mitchell, Austin (G't Grimsby)


Fyfe, Maria
Molyneaux, Rt Hon James


Galbraith, Sam
Moonie, Dr Lewis


Galloway, George
Morgan, Rhodri


Garrett, John (Norwich South)
Morley, Elliott


Garrett, Ted (Wallsend)
Morris, Rt Hon A. (W'shawe)


George, Bruce
Morris, Rt Hon J. (Aberavon)


Gilbert, Rt Hon Dr John
Mowlam, Marjorie


Gordon, Mildred
Mullin, Chris


Gould, Bryan
Murphy, Paul


Graham, Thomas
Nellist, Dave


Grant, Bernie (Tottenham)
Oakes, Rt Hon Gordon


Griffiths, Win (Bridgend)
O'Brien, William


Grocott, Bruce
O'Neill, Martin


Hardy, Peter
Orme, Rt Hon Stanley


Hattersley, Rt Hon Roy
Owen, Rt Hon Dr David


Healey, Rt Hon Denis
Patchett, Terry


Heffer, Eric S.
Pendry, Tom


Henderson, Doug
Pike, Peter L.


Hinchliffe, David
Powell, Ray (Ogmore)


Hogg, N. (C'nauld &amp; Kilsyth)
Prescott, John


Holland, Stuart
Primarolo, Dawn


Home Robertson, John
Quin, Ms Joyce


Hood, Jimmy
Radice, Giles


Howarth, George (Knowsley N)
Randall, Stuart


Howell, Rt Hon D. (S'heath)
Redmond, Martin


Howells, Geraint
Rees, Rt Hon Merlyn


Hoyle, Doug
Reid, Dr John


Hughes, John (Coventry NE)
Richardson, Jo


Hughes, Robert (Aberdeen N)
Roberts, Allan (Bootle)


Hughes, Roy (Newport E)
Robertson, George


Hughes, Sean (Knowsley S)
Robinson, Geoffrey


Hughes, Simon (Southwark)
Rooker, Jeff


Illsley, Eric
Ross, Ernie (Dundee W)


Ingram, Adam
Rowlands, Ted


Janner, Greville
Ruddock, Joan


Jones, Martyn (Clwyd S W)
Salmond, Alex


Kaufman, Rt Hon Gerald
Sedgemore, Brian


Kennedy, Charles
Sheerman, Barry


Kilfedder, James
Sheldon, Rt Hon Robert


Kinnock, Rt Hon Neil
Shore, Rt Hon Peter


Lambie, David
Short, Clare


Lamond, James
Skinner, Dennis


Leadbitter, Ted
Smith, C. (Isl'ton &amp; F'bury)


Leighton, Ron
Snape, Peter


Lestor, Joan (Eccles)
Soley, Clive


Lewis, Terry
Spearing, Nigel


Litherland, Robert
Steinberg, Gerry


Livingstone, Ken
Stott, Roger


Livsey, Richard
Strang, Gavin


Lloyd, Tony (Stretford)
Straw, Jack


Lofthouse, Geoffrey
Taylor, Mrs Ann (Dewsbury)


Loyden, Eddie
Thomas, Dr Dafydd Elis


McAllion, John
Thompson, Jack (Wansbeck)


McAvoy, Thomas
Turner, Dennis


Macdonald, Calum A.
Vaz, Keith


McFall, John
Walker, A. Cecil (Belfast N)


McKay, Allen (Barnsley West)
Wall, Pat


McKelvey, William
Wallace, James


McLeish, Henry
Walley, Joan


McNamara, Kevin
Wardell, Gareth (Gower)


McTaggart, Bob
Wareing, Robert N.


McWilliam, John
Welsh, Michael (Doncaster N)


Madden, Max
Wigley, Dafydd


Maginnis, Ken
Williams, Rt Hon Alan


Mahon, Mrs Alice
Williams, Alan W. (Carm'then)


Marek, Dr John
Winnick, David


Marshall, David (Shettleston)
Wise, Mrs Audrey


Marshall, Jim (Leicester S)
Worthington, Tony


Martin, Michael J. (Springburn)
Wray, Jimmy


Martlew, Eric
Young, David (Bolton SE)


Maxton, John



Meacher, Michael
Tellers for the Noes:


Meale, Alan
Mr. Frank Haynes and


Michael, Alun
Mrs. Llin Golding.


Michie, Bill (Sheffield Heeley)

Question accordingly agreed to.

Resolved,


That this House notes with approval the progress which has been made towards returning to the private sector the shipbuilding yards and other facilities owned by British Shipbuilders; notes also that, despite every effort, it has not proved possible to establish a viable basis for continued shipbuilding at North East Shipbuilders Ltd.; and warmly welcomes the measures proposed by Her Majesty's Government to encourage new enterprise and employment opportunities on Wearside.

Orders of the Day — Transport (Scotland) Bill

Order for Second Reading read.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to privatise the Scottish Bus Group, to make provision for the future of Caledonian MacBrayne and to dissolve the Scottish Transport Group. It will lead to a major change in the organisation of Scotland's public transport system and it marks an important further stage in the Government's policy of returning nationalised industries to the private sector.
The objectives of the Government's privatisation policy are, first, to increase real competition and as a result to increase efficiency and responsiveness to the consumer; secondly, to widen share ownership; thirdly, to release enterprise by removing Government controls from industry; and fourthly, to create new locally based Scottish companies which will strengthen the private sector in Scotland.
The Scottish Transport Group is a significant employer in Scotland. It employs about 10,000 people, providing bus and ferry services. The main subsidiary of the group is the Scottish Bus Group, which employs about 9,000 people. With its 3,000 buses, it is a dominant force in the Scottish bus market. Through its various geographical subsidiaries, it provides over half the local bus services in Scotland. Some of these companies had their origins in the great period of bus expansion. The bus industry was then responding to a growing demand for popular travel. Although it is still a lively and innovative industry, bus operators now face a different situation. The growth of car ownership is mirrored by a long-term decline in the number of people travelling on buses.
However, it is far from being a dying industry. When an economy is growing, the demand for travel grows as well. Public transport has to respond to this and also to new types of transport demand. For instance, increased car ownership can lead to congestion in cities and to the need for public transport to provide a better way of moving large numbers of people on limited road space. New types of vehicle, such as minibuses, can offer cheaper and more flexible ways of meeting demand which cannot be met by larger buses on major routes.
In order to let the bus market respond to the changing demands of the public transport market, it was necessary, first, to free it of the restrictions of regulation which had governed its operations for 50 years. We did that in 1986, when bus services throughout Scotland were deregulated on 26 October of that year. From that date, subject to safety requirements and avoidance of congestion, a bus operator was free to run a service wherever he saw a commercial opportunity. The system was designed to encourage the bus operator to find out what the public wanted and provide it.
There were many prophets of doom who said that deregulation would not work and that rural bus services would disappear. That has not happened. Local authorities have used their subsidy powers wisely. The


network of rural services remains intact. What is more, local authorities have been able to get their subsidised bus services at significantly less cost. Far from leading to a decline in bus services generally, deregulation actually led to an increase in the number of vehicle miles operated. Critics have said that these extra miles are on existing routes. Some of them are, and the result is that the busy routes, which were once the preserve of a single operator, now have competition. This means more buses and downward pressure on fares. In some cases there have been significant fare reductions.
Deregulation has also allowed new operators to emerge. In Scotland, 40 new firms have, since deregulation, provided local services. The number of vehicle miles provided by independent operators has increased by a third. Deregulation has encouraged innovation. There are more minibuses providing new services in housing estates. There are hail-and-ride services.
Having deregulated bus services in Scotland, the next step in making the industry more responsive to its customers is privatisation. The privatisation of the Scottish Bus Group will create 11 new locally based companies where previously there was only a single, dominant, nationalised industry.

Mr. James Wallace: I hear what the Secretary of State says, but would he be concerned if the result of privatisation were that the 11 separate companies were all bought up by a single company? Does he believe that that would promote competition, and will he seek powers to try to prevent that from happening?

Mr. Rifkind: I would be intensely disappointed if that were to happen, but I do not believe that it will. I shall deal later with the Government's approach to the flotation of the individual companies, which will be relevant to the hon. Gentleman's point.
We have three important aims in our privatisation of the Scottish Bus Group. I want to explain in greater detail how each will be achieved.
The first aim is viaible and sustained competition. As I announced to the House on 30 November, the Scottish Bus Group, with its 3,000 buses, will be split into 11 units. These will vary in size, depending on local competition. Seven of the units will be existing subsidiaries of the Scottish Bus Group. The number of buses will range from 122 buses to 340 buses. All broadly correspond to the boundaries of a regional council, although since deregulation there are no longer exclusive territories. Two further companies will be created by combining Western and Clydeside and by combining Central and Kelvin. That will create two companies of around 700 buses and provide balanced competition with Strathclyde Buses, which is of similar size. In addition, Scottish CityLink, the coach firm, and SGB Engineering will be separately privatised to make the total of 11 units.
We believe that the Scottish travelling public will benefit from the creation of a number of new independent companies that can sustain vigorous competition.

Mr. David Marshall: The Transport Act 1985 led to the privatisation of the National Bus Company in England and Wales. The Government saw fit not to privatise the Scottish Bus Group at that time.

What has happened since then to bring about that change of policy? What is the benefit of privatising the Scottish Bus Group now when there was apparently no benefit from doing so three years ago?

Mr. Rifkind: The hon. Gentleman will recall that we did not then rule out the privatisation of the Scottish Bus Group. Two aspects led to no measure being introduced at that time. First, we wished to give priority to deregulation. We believed that it was such an important change that it had to be allowed usefully and comprehensively to come into effect. Secondly, we thought that it would be viable to look at what happened after the National Bus Company was privatised. The privatisation has been successful and it has led us to conclude that the time is ripe to introduce these proposals.
We considered whether we should divide the Scottish Bus Group into an even larger number of units in order to create more widespread competition. We were much impressed by the enthusiasm of the work force of the Bannockburn depot to set up their own company. We took their proposals very seriously. However, we decided that a smaller number of larger companies would also ensure vigorous competition and would at the same time provide greater stability of services.

Mr. Harry Ewing: I notice that in the Secretary of State's recent statement and in his speech this evening he has deliberately referred to the workers at the Bannockburn depot. Is he aware that they wrote to me personally and, I suspect, to a number of my hon. Friends and complained about the fact that their Member of Parliament had refused to provide them with the information that they needed on which to base their inquiries about buying the depot?

Mr. Rifkind: That is untrue.

Mr. Jimmy Hood: Not at all.

Mr. Rifkind: I am sorry; I repeat that that is quite untrue. I do not know what they have said to the hon. Member for Falkirk, East (Mr. Ewing), but the allegation that he has reported to the House is untrue. After the meeting between my hon. Friend the Member for Stirling (Mr. Forsyth) and his constituents from the Bannockburn depot, he discussed their request with me and we took measures to ensure that the information that they had requested was made available to them. I personally ensured that the Scottish Bus Group would ensure, for its part, that the information would be made available to the people concerned.
If the hon. Gentleman has received such a letter, I should be grateful if he will pass it to me so that we may consider what points have been made. I am entirely confident that, quite apart from his enthusiasm for the proposals, my hon. Friend has complied 100 per cent. with the responsibilities that he would properly have undertaken as a local Member of Parliament.
Obviously the pattern of sales depends on the bids that are made, but it is clear that bus competition will be maximised if the new companies that we are to create form a net addition to the number of bus companies that are already operating.
Our second aim is local control and responsiveness to local needs. The existing organisation of the Scottish Bus Group obviously makes provision for decisions to be devolved to local management. However, we want to


increase this local responsiveness by setting up independent companies that are locally based and that are in close touch with the communities they serve.
The new companies will be free both from the central control of being part of a large group and free from Government controls over their investment. We took that into account in our decisions on the pattern of privatisation. I know, for instance, that the Borders was keen to retain its own locally based bus company, Lowland Scottish, which it has had since 1986. This local company was able to be more responsive to local needs. I was glad to be able to announce that Lowland Scottish would be privatised as an individual company. Elsewhere, the scale of the companies should allow them to be in close touch with their communities.
Our third aim is to widen share ownership and increase employee involvement in the firms in which they work. I was delighted to see the widespread interest shown by management and employees in buying their own companies which followed on my statement on 30 November. For instance, a substantial number of the work force at Strathtay Buses are already contributing to a savings scheme to buy shares in their own company. In Northern Scottish, which serves Grampian, staff have also started a savings scheme and are keen to take part in a buy-out. Highland Scottish staff have started a savings scheme. In Midland and Fife the management are keen to mount bids involving the staff. In fact, I would expect that in every bus company a management-employee buy-out proposal will be developed.

Mr. Alistair Darling: May I ask the Secretary of State a question that I asked him yesterday on electricity privatisation but which he failed to answer? Even if there is a management buy-out, what will he do if the shareholders in the new company sell to a third party? That happened in England. There were management buy-outs, after which there were sales to Gibraltar and other places. How will the Secretary of State ensure that control over the Scottish bus industry remains in Scotland: or is he concerned only about the location of its head office—never mind who owns and controls the undertaking?

Mr. Rifkind: We are seeking to encourage bids not just from management but from management and employees, combined. There is a crucial difference between the two. Apart from the obvious difference, there is also the factor that if management and employees combine in a successful bid to acquire a company, the proportion of the shares that are acquired to control the company could not lead to a change of control unless the staff as well as the management wished such a change to take place. The hon. Gentleman has referred to management alone being involved in a buy-out. That is one of the reasons why, if one had to choose between the two options, I should prefer a management-employee buy-out to succeed rather than one that involved the management alone.

Mr. Robert Hughes: The Secretary of State says that he is keen on employees becoming involved in the ownership of companies. Will he arrange for the Bill to provide for a minimum number of employee shareholders, and will he also provide for the right of veto by employees to prevent sale to a third party?

Mr. Rifkind: If the hon. Gentleman waits for a moment, he will find that I am about to refer to the provisions in the Bill that represent Government policy on that matter. It will answer at least part of the question that he has put to me. Staff and management in virtually all the companies in Scotland have expressed their support for the possibility of a buy-out, and I am delighted to read of the support for buy-outs which is forthcoming from the trade unions. It was reported in the press that the Transport and General Workers Union will encourage its members to participate in buy-out schemes. The Unity Trust, which is financed by the trade union movement, has already helped to provide the funds for a buy-out in England. I understand from the press that there are to be discussions about its involvement in the Scottish Bus Group privatisation.
We in the Government will play our part. In my recent statement to the House, I said that I was keen that this privatisation should increase employee participation and that financial assistance would be provided to management-employee teams who are considering making a bid. Hon. Members on both sides of the House welcomed this undertaking. The financial assistance will be designed to enable management-employee teams to obtain the professional, financial and other advice necessary to enable them to put forward credible proposals for purchasing their companies. It will be available to one management-employee team per company.
The aim is to ensure that, when developing proposals, management-employee teams are not disadvantaged as compared with existing companies in the private sector who already have their own sources of professional advice and may be contemplating making bids. The assistance will be available in the form of an underwriting, by the Scottish Transport Group, of a proportion of the fees which teams will incur. In the event of a bid being successful, the assistance will require to be repaid. If, however, the bid fails, the greater part of the fees will be met.
I am pleased to announce that the level of assistance in such cases will be 75 per cent. of the costs of approved fees for the preparation of a detailed bid, in each case not exceeding £65,000—that is, maximum assistance of £48,750. In addition, the Scottish Transport Group will run seminars for managers and make a video on buy-outs which will be shown at depots. [HON. MEMBERS: "Hear, hear".] I am delighted at this enthusiastic welcome for initiatives which the Government have in mind. We have not yet decided who will feature in the videos, but I am open to constructive suggestions from Opposition Members.
I was also asked what other form of preference would be given to management-employee teams—in particular whether they would be given financial assistance towards the bid itself. I am bound to say that it would be somewhat circular for the Government to give money to a potential purchaser to buy an asset from the Government. An element of financial preference was given to management buy-outs in the National Bus Company privatisation.
I have already said that we want a rather different pattern of bids in Scotland, with much greater involvement by employees. This is already evident with the widespread reports of management-employee interest. We would clearly wish to give some preference to management-employee proposals, but I have already made it clear that


we cannot give a guarantee that any one type of potential purchaser will always succeed, irrespective of the price offered.
As hon. Members will see from clause 2, price is not the only consideration which I shall take into account when deciding on which bids to accept. The main test will always be the promotion of sustained and fair competition. Subject to that, the other considerations I will have to take into account are employee participation and price. New Scottish-based companies with significant employee participation will clearly satisfy some of the competition and participation objectives, but it is essential that the price is also relevant to the value of the assets.
Hon. Members will wish to note that we have given greater emphasis to employee participation in the Bill than was the case with the National Bus Company disposals in the Transport Act 1985. In particular, clause 2 provides that emloyee participation should be taken into account —with the question of sale proceeds, and subject to the main objective of promoting competition—in framing the disposal programme. In the 1985 Act, employee participation was not taken into account when the programme was being prepared and it was taken into account only so far as practicable when it was carried out. This difference in emphasis reflects our keenness to have management-employee buy-outs, provided, of course, that a proper price is paid for public assets.
I welcome the proposal put forward by the management and employees of Grampian Regional Transport to buy their company from its owners, Grampian regional council. I particularly welcome the fact that the buy-out has the support of all policital parties on Grampian regional council. The proposal provides for substantial employee participation in the company through an employee share ownership plan. Discussions between the regional council and the Scottish Development Department are now at a very advanced stage and I expect, subject to studying information sent to me yesterday by the council, to be able to give formal approval to the proposal soon.
I very much hope that the three other public transport companies—in Edinburgh, Glasgow and Dundee—will follow the same course as Grampian and provide their employees with the same opportunity to participate in the ownership of their companies.

Mr. John McAllion: When the Secretary of State last made a statement on this matter, he said that there was evidence of support among employees of the Tayside public transport company for privatisation. I asked him to give us the evidence, but he did not provide any. Will he take this opportunity to give us the evidence which led him to claim that there is support among employees of the Tayside public transport company for privatisation and a buy-out?

Mr. Rifkind: I notice that the hon. Gentleman mentions employees and does not dispute the claim about management. It appears that there is common ground between us that the management in Dundee are keen on a buy-out.

Mr. McAllion: indicated dissent.

Mr. Rifkind: The hon. Gentleman shakes his head at that, too. All I can say is that that is the information that I was given. If the management and the employees show that they are uninterested in having the same opportunities as the management and employees in Grampian, that will be interesting. In Strathtay, which operates in a comparable part of Scotland, we have found that that is not the view of employees.
The other component of the Scottish Transport Group is Caledonian MacBrayne. It provides essential ferry services on the west coast of Scotland. It has 28 vessels of varying types and sizes, depending on the different requirements of its 26 routes and employs about 800 people. When we came to office we increased the support for Caledonian MacBrayne significantly in real terms. During the past three years, we have been able to reduce subsidy while keeping the general level of fare increases in line with inflation. The reduced subsidy reflects a reduced need for subsidy to provide the same level of service—it is not a reduction in our commitment to ferry services. It is the result of reduced oil prices, increased carryings and increased efficiency. We are anxious that this trend should continue, and that the company should further reduce subsidy while maintaining the standard of service.
Since 1979, there has been substantial investment in CalMac. We have approved £22 million in new vessels and £6 million on new piers. In 1984 the new Isle of Arran came into service, and in 1985 the new Hebridean Isles came into service. In 1987, the new Isle of Mull was launched at Port Glasgow and early next year a new vessel to serve Barra and Lochboisdale will be launched, also at Port Glasgow. Linkspans have been added to the piers at Uig, Tarbert, Lochmaddy and Colonsay. A linkspan is at present being built at Barra. These are greatly improving the time for unloading and the quality of the service.
For the most part, however, these services do not make a profit, and a subsidy of about £6 million a year is required. I have always been clear that Caledonian MacBrayne is not a straightforward case for privatisation. The first priority in any arrangements is to guarantee the lifeline services which they provide. It is for this reason that, having studied the issues carefully, I have decided that, on the dissolution of the Scottish Transport Group, the ownership of Caledonian MacBrayne should be transferred to the Secretary of State. The Bill makes provision for this.
I intend to appoint a new board for the company, which will contain persons with commercial expertise, including some with first-hand knowledge of the islands served and their needs. That is vital to ensure the responsiveness of the company to its customers. As a matter of priority, I would look to the new board to examine the possibilities of relocating the headquarters nearer the centre of the area which it serves. Oban seems likely to prove a suitable place for this purpose. I shall also ask the new board to explore the possibility of transferring to the private sector the Gourock-Dunoon and Wemyss bay-Rothesay routes. It is anomalous that Caledonian MacBrayne operates a substantial service on a route similar to one operated by an unsubsidised private operation. In the longer term, I will expect the board to examine carefully all existing practices in the company's operation with a view to providing more efficient and cost-effective ways of providing at least the present standard of service.
No options for the longer term will be excluded, subject to the overriding proviso that they must ensure at least the


present quality of service to the islands. I consider that, with its own board and independence, CalMac will be well placed to continue to provide an improving and cost-effective service to the islands.
The Government attach great importance to improved communications for the remoter parts of Scotland and, in particular, for the islands. As I have mentioned we have provided substantial resources for Caledonian MacBrayne. We also believe that the smaller islands should not be neglected. In Orkney, a substantial improvement is being carried out in the internal ferry services supported by Government grant. Last week we announced that we would be paying grant on two new roll-on/roll-off vessels for the outer North Isles of Orkney. We accept that, in per head terms, the cost of providing adequate communications for small remote islands may appear large. However, we believe that, within limits, everyone should enjoy benefits of improved communications.
A good example of the problems of improving communications in remote areas is Vatersay in the Outer Hebrides. In 1985 my predecessor announced that he was prepared to pay grant on a causeway linking Vatersay with Barra. Since then, the islands council has taken forward the necessary preparatory work promoting a parliamentary order and carrying out a hydrographic survey. The main obstacle to further progress was accommodating such a project within its normal capital allocation. I am happy to announce today that I shall be making a special addition to the islands council's capital allocation for 1989–90 and for the following year to accommodate the building of the Vatersay causeway.
I understand that Vatersay has seen an alarming drop in population in recent years and also that it is the firm view of the islands council that this trend can be reversed with improved communications. I therefore look to see a return of population to Vatersay with the improved communications which this causeway will bring.
In addition to the bus group and CalMac there are also a number of minor interests of the Scottish Transport Group to be disposed of, including the SMT Insurance Company and Sanderson Travel, before the Scottish Transport Group can he dissolved. The future of those subsidiaries is being considered at present, with the help of my financial advisers, Quayle Munro. I may decide that some such disposals should take place prior to the passage of the Bill under the Scottish Transport Group's existing powers to dispose of activities not required for the on-going purposes of their business. Any disposals made in advance of legislation will, however, be limited to these minor interests and will not include any of the operating subsidiaries of the Scottish Bus Group.
I should like to turn briefly to the detailed provisions of the Bill. The first part deals with the bus group. It gives me the power to draw up, after consultation with the Scottish Transport Group, a programme for the disposal to the private sector of the Scottish Bus Group's subsidiaries and the minor subsidiaries of the Scottish Transport Group. It provides that, in preparing that programme, my main objective will be to promote sustained and fair competition. I am further required to have regard to the desirability of encouraging employee participation, a matter to which I have already referred, and to the effect of implementing the disposal programme on the net proceeds to he expected from all disposals.
The Scottish Transport Group will be required to implement the disposal programme within a time scale which will be specified in the programme and will be given the necessary power to make any necessary preparations— for example, by forming subsidiaries or transferring property rights or liabilities between them. In implementing the programme, the group will be required to have regard to my main objective of promoting sustained and fair competition, and to the other considerations relating to employee participation and disposal proceeds relevant to the drawing up of the programme. Each disposal will require my consent. The group is furthermore required, in conducting its business in the period before privatisation, to have regard to the estimated effect of its activities on the likely net proceeds of sale.
Part II of the Bill relates to the group's shipping operations and simply provides for the transfer of ownership of Caledonian MacBrayne to me on a date to be appointed, after suitable preparations have been made. It also provides that the annual accounts of CalMac should be laid before Parliament while the company is in my ownership. There is also provision for the Secretary of State to give any necessary directions and to guarantee borrowing by the company. Part III of the Bill contains a number of general provisions including powers to enable transitional arrangements to be made, should they be needed, with regard to group services and pensions, financial provisions and powers to dissolve the Scottish Transport Group once the disposal programme has been completed and the ownership of Caledonian MacBrayne transferred to the Secretary of State.
The Bill has important implications for the future of Scottish public transport. It will create new locally based Scottish bus companies designed to provide competitive bus services. That will benefit the traveller who stands to gain from the competition among a number of companies. It will give a boost to Scottish enterprise. It will provide Caledonian MacBrayne with its own independent board and the stimulus to increased cost-effectiveness and responsive to its island communities.
The reaction of the employees and management of the various companies that make up the Scottish Bus Group demonstrates that they are enthusiastic about the opportunities that are now available to them. In Grampian there is all-party support for similar proposals for the passenger transport company in that area. If the Labour party, the Democrats, the Nationalists and the Conservatives in Grampian believe it is right to give employees and management an opportunity to own the bus company in which they work, I hope, although I cannot anticipate, that the same parties in the House will not wish to deny management and employees elsewhere in Scotland similar opportunities. If they wish to deny them, it will certainly be appropriate and opportune for an explanation to be given as to the differences between their approach to Grampian and to the rest of Scotland.
The Bill offers exciting opportunities in the bus industry which will benefit the consumer as well as the employees and management. Accordingly, I commend the Bill to the House.

Mr. Brian Wilson: I begin on a note of total harmony, by welcoming very warmly the Secretary of State's announcement about the causeway to


Vatersay. That is a matter close to my heart and the heart of my hon. Friend the Member for Western Isles (Mr. Macdonald). I have not the slightest doubt that, without that announcement, the island of Vatersay would have gone the way of other Hebridean islands and within a relatively short time would have been left devoid of population. That would be particularly inappropriate as Vatersay is populated largely by people whose forebears came from the island of Mingulay, when it became depopulated due to the lack of a reasonable harbour. I welcome the announcement very warmly and advise my hon. Friends that, if they want £3 million on Wednesday, they should get an Adjournment debate on Thursday.
At that point, the harmony ends. We have heard from the Secretary of State the familiar fable about thrusting competition, undisturbed rural services, eager shareholders, and delighted consumers—a veritable Brigadoon. It is all the more remarkable that the party that the right hon. and learned Gentleman stands for measures its support at 19 per cent., even in Brigadoon. He spoke of real competition and new locally based Scottish companies, but all those delights are speculation. None of it is in the legislation. Furthermore, there is absolutely nothing in the English experience that leads us to believe that the picture that the Secretary of State has painted is likely to become reality.
We are against the privatisation of the Scottish Transport Group and of the Scottish Bus Group in particular. We consider it an unnecessary measure, and we believe that we should leave well alone. We believe that there is no demand from consumers or employees of the Scottish Bus Group for its privatisation. Now, through yet another unwelcome piece of Conservative legislation for which no mandate exists in Scotland, we are engaged in a damage limitation exercise.

Mr. Rifkind: So that we can be clear about the hon. Gentleman's position and that of his party, is he saying explicitly that, even if he could be satisfied that every company that is to be privatised would be sold to a management-employee buy-out, nevertheless he would advise his hon. Friends to vote against the Bill because of his opposition to privatisation?

Mr. Wilson: I shall come to that in good time. For the moment, it is important to note that that is not what is in the Bill. In spite of the Secretary of State's impressive sleight of hand in attempting to suggest otherwise, that is not what is on offer, so he asks me a hypothetical question.

Mr. Nicholas Bennett: What is the hypothetical answer?

Mr. Wilson: The real answer will come in a short time, if the hon. Gentleman can contain his red-tied eagerness.
Scotland needs a comprehensive, integrated bus service. That service can be run only with due regard for the social interest. In this, as in so many other matters, that is the philosophy which the Government have deserted.
The Secretary of State spoke about the need to respond to changing times and the increase in private car ownership—all of it true—but the implication that, because more people own private cars, we need less social remit in the public transport service which remains, stands truth on its head. The fact that proportionately more

economically disadvantaged people and people living in rural areas depend on public transport is the justification for leaving the service in public hands and having a social remit rather than a justification for the priority of private profit.
No transport debate can be complete without reference to safety considerations. There is much talk about bus competition. The Secretary of State referred repeatedly to "real competition", as though it were universally accepted that that was a condition to which to aspire. As we watch the deregulated competitive buses hurtling down the A9 or the unimproved A74 or the unextended M8, some of us question whether competition on the roads is such a wonderful idea. We sometimes have the uneasy feeling that here is yet another disaster waiting to happen.
We do not believe that the product of the exercise will be a series of worker and management-owned and controlled bus companies throughout Scotland. We would conditionally welcome that. We see the Bill as an opportunity on the cheap for the expansion of large and powerful operators whose loyalty is not to communities, levels of service or working conditions. The loyalty will be to profit. How that profit is gained will be a matter with which the Government will not concern themselves too much.
I want to take up the points that the Secretary of State made about Grampian. The right hon. and learned Gentelman trumpeted Grampian loudly, both when he announced the legislation and again tonight. We are told that Grampian is to be held up as the model of political unity on the joys of privatisation. That is rubbish and a travesty of the truth.
In June, when the Secretary of State initially intimated his intention to privatise the Scottish Bus Group, naturally the municipal bus authorities and those who run them listened to his words and started to draw some uncomfortable conclusions. Bus Business of 15 June 1988 stated:
Scotland's four municipally-owned bus operators have been thrown into doubt about their future by the suggestion from Scottish Secretary Malcolm Rifkind that his announcement about the break up and privatisation of the Scottish Bus Group drew attention to their 'somewhat anomalous position'".
The Secretary of State went on to say tactfully that the Scottish Bus Group decision must have "implications for them". The municipal bus authorities saw a thinly veiled threat that they were next to go down the road taken by the Scottish Bus Group. Not surprisingly, they looked again for ways to pre-empt, and engage in damage limitation. To say that the people who controlled and operated these municipal services in Grampian and elsewhere were advocates or supporters of privatisation is not true.

Mr. Rifkind: I have listened to the hon. Gentleman with considerable fascination. If he suggests that Grampian regional council has no choice and that the employees, management and the council are simply indulging in what he calls "damage limitation", can we hear whether he would advise Strathclyde, Lothian and Tayside to indulge in damage limitation and to privatise their companies for the same reason? Will the hon. Gentleman make that clear? If the hon. Gentleman would not so advise them, why are those councils somehow judged by different criteria to those applying to Grampian?

Mr. Wilson: I am surprised that the right hon. and learned Gentleman's normal facility for words has deserted him. He seemed to be under the impression that my comment that Grampian made a pre-emptive strike was synonymous with what he suggested I said, which was that it had no choice. I should have thought that those were two different concepts. On a good night, the Secretary of State would have no difficulty in distinguishing between them.
What about Strathclyde? I am not here to advise local authorities on how to react. I have no doubt that, on exactly the same basis, they will have to make exactly the same calculations as Grampian has done. The emphasis is again on damage limitation and pre-emptive strike—not,as the Secretary of State suggests, on the wishes of employees local authorities, Opposition parties and, least of all, consumers. That is the distinction.

Mr. Robert Hughes: Having had extensive discussions with employees in the Grampian bus companies, I assure my hon. Friend that he is right. The approach to privatisation is one not of enthusiasm but of resignation and desperation. The employees were terrified that their fate would lie in the hands of the Secretary of State.

Mr. Wilson: I am grateful to my hon. Friend. He is right and reinforces my point.
The next point of distinction involves the way that "privatisation"—if the Secretary of State demands the use of that word—was carried out. Bus Business of 28 September 1988 stated:
A council spokesman said that the company was 'not on the open market' and that the management and staff of the bus company were the only present bidders. But it was not clear this week if Rifkind would allow the deal to go through, or if he would rule that the company should be offered for sale to all-comers.
The Secretary of State seems anxious to draw parallels. He told us that tomorrow he will approve this great privatisation exercise. Is he drawing the same parallel with the Scottish Bus Group? If, on the same terms, those involved in the employee-management buy-out seek to take over without the companies going "on the open market" but they are offered directly to them as "the only present bidders", will the right hon. and learned Gentleman maintain the parallel that he has sought to draw and accede to those demands? Apparently, the right hon. and learned Gentleman does not wish to intervene at this time.
That deals easily with the Grampian issue of which the Secretary of State made such a meal. The Grampian structure provides for two councillor directors and two worker directors. If that is the kind of arrangement that the Secretary of State wants, he should withdraw the legislation, go back to the drawing board and do exactly as Grampian has done, and we shall give close consideration to supporting that as a decent compromise in the public interest.
But that is not what the right hon. and learned Gentleman expects to see or has any interest in seeing. He does not want anything similar to what Grampian has done. In his heart, he knows that this is a cowboy's charter and an invitation to asset strippers. He knows that the majority of those who work in the Scottish bus industry will pay the price of this legislation in jobs and conditions rather than end up as proud co-owners of the industry in which they work. The folksy image of conductors controlling their destinies as well as their ticket machines

is largely a myth. We need not look in a crystal ball, because we can read the book—the one that tells the story of what has happened in England.
We listened in vain to the Secretary of State, hoping for new information. He moved around the subject. He said that he was delighted to hear about widespread interest in
management-employee buy-outs. He said that he was keen —the one thing that no one would accuse the right hon. and learned Gentleman of not being is keen—and enthusiastic about management-employee buy-outs. We listened in vain for new information about how these are to be encouraged, or, indeed, made possible. The Minister's fig leaf of enthusiasm for employee buy-outs has not expanded. Nothing turns that aspiration from pious hope even to a reasonable prospect of reality. Even if some management-employee buy-outs succeed, the Bill contains no safeguards against predatory takeover, probably within months, rather than years. We shall fight in Committee for those safeguards, and the Government's good will in the whole question of management-employee buy-outs will be judged by their responses.
Why have we heard so much in Scotland about these management-employee buy-outs when we know that the legislation does nothing to promote them? It is lip service to the political climate in Scotland. The reasoning is that the Government might get away with it if they say often enough that they are trying to promote management-employee buy-outs. That might then have some credibility in Scottish public opinion and make the idea seem a little less naked and foolish than it would otherwise. As usual, the Conservative party in Scotland underestimates the intelligence of the people to whom they are appealing. People can easily see through the Government's plan. They will not listen to tonight's fine words, but will look at the legislation and the reality that eventually emerges.
Unless the means of promoting management-employee buy-outs are written into the Bill, the Minister's avowal of sympathy for them will be seen as hollow and hypocritical. No one can serve two masters. If the Government are legislating in the interests of Stagecoach and its ilk, no number of honeyed words will disguise that fact.
Clause 2(2) of the Bill states:
The Secretary of State shall have regard … to the desirability of promoting the acquisition by persons employed in any undertaking or part of an undertaking which is to be the subject of a disposal under the programme.
Those words are meaningless unless the Government choose to make them meaningful. There will be no shortage of support in Scotland for such a course.

Mr. Bill Walker: The hon. Gentleman will be aware that Stagecoach is based in my constituency. Is he suggesting that it is not a good employer and that it has not done considerable good by the travelling public in my constituency? If he is, he does not know the people well or the benefits that have been received.

Mr. Wilson: I shall deal with Stagecoach later. However, I read in a transport magazine that, when there was discussion about whether a Hungarian company might buy out the Scottish Bus Group, a manager—the hon. Gentleman will be pleased to hear that it was a manager who made this disrespectful remark—suggested that he would rather work for Gorbachev than Souter.
I am sure that, as an upholder of law and order, the hon. Gentleman will wish to balance his remarks by giving


us a list of the offences of which that epic private enterprise company has been convicted since it has been operating on the highways and byways of Scotland.
The Scottish Consumer Council told me:
We have no doubt that management-employee buy-outs run by people with a commitment to the communities that they serve will be the most effective means of protecting rural and off-peak services.
As the Secretary of State has rightly said, the trade unions have voiced some support for the proposal because they see it as the best and probably the only way of defending the jobs and the conditions of their members.
Mr. Hamish Morrison of the Scottish Council (Development and Industry) is quoted as saying last year:
Simply to offer assistance with drawing up a bid with no guarantee that management and employees will not be outbid by competitors with deeper pockets is wishful thinking. What is needed is a solid assurance from Mr. Rifkind.
We have not had that solid assurance tonight and, without it, the Secretary of State's presentation is worthless.
I wish to talk briefly about the English experience. Let us remember that, when the National Bus Company was privatised, there was a 5 per cent. discount offer to management-employee buy-outs. There is still no word of that in Scotland and it is perhaps a tribute to the Secretary of State's skill with words that he almost managed to make this sound like a bonus to the Scottish employees of the bus companies.
In England, the early sales of companies in the National Bus Company went mainly to management buy-outs with very little mention, incidentally, of employees. That was the early trend of the first 30 sales. Only a handful went to the existing private sector. Then the big guys realised that there was money in this and that these companies were being sold off at bargain basement prices. To help them on their way, the Government obligingly changed their rules under which the companies were to be sold.
A different picture then emerged. The Stagecoaches from north and south of the border started taking over the companies, so that, by October 1987, Bus Business again reported:
Now it is unusual, not the norm, for managements to secure a buyout. And the true employee ownership approach, implicit if not explicit in the government's plans, has been seen in only three or four sales. The carefully controlled policy of promoting competition through privatisation has been faithfully espoused by the government in word but not in deed … The industry grapevine is groaning with endless talk of companies that are secretly allied and of mergers deals and shadowy connections between others.
That is the reality of England and Wales at present. There is not the slightest reason to suppose that it will not become the reality in Scotland.

Mr. Nicholas Bennett: As the hon. Gentleman is quoting examples in England and Wales, will he explain why the president of the Bus and Coach Council, at its Eastbourne conference this year, was reported in Buses last month as saying that the industry is enjoying its new environment and its new role as an entrepreneur and was a "born-again commercial industry." He said that the industry was delighted that it was privatised and deregulated.

Mr. Wilson: I should like to help the hon. Gentleman, but, before I could do so, I should have to know who the

chairman of the Bus and Coach Council is. For all I know, it might be like the hon. Gentleman quoting in innocence the chairman of a Scottish health board.

Mr. Bennett: The hon. Gentleman will want to know that the chairman is Mr. Irwin Dalton, formerly of the National Bus Company.

Mr. Wilson: I never fail to be astonished by what amuses Conservative Members.
It is already abundantly clear that the private sector will not sit back in Scotland and allow management-employee buy-outs to occur in the public interest. I am sure that the hon. Member for Tayside, North (Mr. Walker) would be appalled if that were the case.
Mrs. Anne Gloag—I do not know whether she is any relation of the Famous Grouse, but she is the managing director of Stagecoach—immediately announced:
We certainly intend to consider submitting bids for all of the separate units when further details become available in the New Year.
That is the point at which the proud announcement by the Secretary of State that employee buy-outs would be entitled to the vast sum of £48,750 for a sort of bus-world legal aid is put into perspective. That sum is washers in the back pocket to such outfits as Stagecoach and others that these buy-outs will be up against. If that sum, plus a video, is all that the Minister has to offer, there will be precious few management-employee buy-outs.
I do not make a great issue of the origins of the companies that are doing the buying out. That is not the problem. I have mentioned Stagecoach, which is active down south. It is a transborder operation. It is a firm of couthie Scottish capitalists of the many-a-mickle-mak's-a-muckle school of exploitation. When Scottish bus employees are asked by whom they do not wish to be taken over, they respond unanimously, "Souter." So the question—[Interruption.]
Conservative Members, whose wits are dim—"dimwits" is probably an unparliamentary expression—think it tremendously funny that I should be saying that workers in Scotland fear a Scottish capitalist as least as much as an English or outside capitalist. Anyone who knows anything about class politics as opposed to tartan trivia, and anyone who knows the history of Scottish industry and enterprise, will understand that there is nothing funny or unusual about that attitude. It does not matter primarily whether we are talking of an English company or a Scottish company. The important considerations are the motives and nature of the company, the services it provides and the conditions that it provides for its workers.

Mr. Rifkind: The hon. Gentleman has made an important statement which is at variance with the questions that were put to me by the hon. Member for Edinburgh, Central (Mr. Darling). It seems that he does not mind whether it is a Scottish company or an English company. He thinks that the consequences will be exactly the same, and he draws no distinction between the two. Will he confirm that?

Mr. Wilson: I think that the record will show that I said that I do not think that that is the first priority. The priority is the nature of the company and where the management is. With Stagecoach the money comes from Canada—

Mr. Bill Walker: Will the hon. Gentleman give way?

Mr. Wilson: No, I shall not give way further.
There is an interesting example of how Stagecoach has operated in the south by jumping on the privatisation gravy train. The hon. Member for Tayside, North greatly approves of Stagecoach. The company bought Hampshire Bus, and one cannot go much further south than that company. I am sure that the hon. Member for Moray (Mrs. Ewing) approves of that move as a piece of buccaneering Scottish capitalism. It bought the Hampshire company for £2·1 million. Two weeks later, it sold the bus station at Southampton for £4 million. Is that what the Secretary of State describes as the enterprise culture? Presumably the buying price for the Hampshire company was recommended by Government officials as being in line with Government policy.

Mr. David Marshall: Does my hon. Friend agree that it is disgraceful that the Secretary of State for Transport has refused to divulge any of the details of sales of individual bus companies in England and Wales? He said that at some future date we may get the global sum when all the sales have been completed. It is a common belief—I must confess that I am not sure whether it is a fact—that one company sold assets worth £6 million, which was much more than the sum paid for the entire company. That is an example of what is taking place all the time. Unless the practice is checked, it will take place in Scotland as well.

Mr. Wilson: Of course it will take place in Scotland. It is all part of the game. That is what it is all about. It is not about encouraging management-worker participation. Instead, it is about flogging off public assets.
The asset-stripping potential in the sale of the Scottish Bus Group is considerable, and especially in the sale of Eastern Scottish Buses, which will be watched extremely closely. That is because along with the bus group goes some valuable real estate. I have no doubt that my hon. Friend the Member for Edinburgh, Central (Mr. Darling) will wish to expand on that.
Many of my hon. Friends will refer to the concerns that exist in the areas that they represent and the implications of this petty piece of privatisation. They will tell the House that managements and employees generally prefer to maintain the status quo and are not interested in buy-outs, except as a pre-emptive strike. Our interest lies in protecting employees and consumers and maintaining standards of safety, service and efficiency. We believe that these standards are best protected by the status quo, which the Government choose to despise. We have no doubt that they will he least protected by the market force mentality of bus entrepreneurs.
There is already an example of entrepreneurship in Scottish transport. In 1985, the Government sold a company called MacBrayne Haulage to the private sector. By any standards, it was a seedy privatisation. It demanded many answers and it attracted only a few. MacBrayne Haulage was a branch of the Scottish Transport Group and it had a social remit and a special responsibility to serve the isles. It had a modern fleet of vehicles. It had a depot in Blochaira road, Glasgow, which had a substantial value. It was estimated that the company's assets were worth £1·5 million. It was a tasty morsel for one of the entrepreneurs whom the Government are so anxious to encourage. As a result, the Government privatised the company.
The privatisation took place before I became a Member of the House, but sitting on the Government Front Bench during the relevant period was Mr. John MacKay, sadly now departed to other places. Mr. John MacKay advanced much the same case as the Secretary of State adduced tonight. He talked about greater efficiency and competition and sweeping out the cobwebs of public ownership and introducing thrusting, dynamic private enterprise.
MacBrayne Haulage was put up for sale and it did not attract much interest. It is not clear to this day whether there was one offer or two. The Scottish Office said that there were two, but the second was never identified. There was certainly one offer, however, and it came from a Mr. Bill Walker of Kildonan Transport. He is another couthie entrepreneur. Alas, he is not a constituent of the hon. Member for Tayside, North. Such entrepreneurs must exist elsewhere as well.
Mr. Walker put in his bid for MacBrayne Haulage, only to find that it was refused. By a strange circumstance, Mr. Walker shared the same firm of financial advisers as the Scottish Transport Group, which had been ordered to sell off the company. Doubtless it was all completely above board. Kildonan Transport and the Scottish Transport Group went into a huddle. Lo and behold, this time round a deal was struck. The £1·5 million assets of MacBrayne Haulage were transferred to Kildonan Transport for a figure reported at the time—it has never been denied subsequently, although it might be on the high side£of £450,000.
Mr. Walker was asked whether he thought that he had secured a bargain, to which he replied, memorably:
It would be a stupid man who did not think that.
He added that he had been looking for a device that would enable him to stop paying tax. He had assumed that MacBrayne Haulage was a loss-making concern. Instead, when he examined the books he found that it was a profitable business with tremendous potential. As a result, he bought it for £450,000. It was calculated immediately that within two years he would be able to recover his outlay and have in excess of £1 million of assets, after taking depreciation into account. It was asked, "How could this happen?" It was private enterprise at its best. This week, slightly on the long side of two years, Mr. Walker is negotiating with a company in Bradford. I expect the sale of Kildonan Transport to be finalised within the next few days for a sum in excess of £1 million.
That is what privatisation is about. It is the ripping off of public assets by a combination of greed and incompetence. If such things were to happen in the private sector, it would be defined as corruption. If a trustees or solicitors handled a person's assets in the same way as the assets of MacBrayne Haulage were handled by the Government, there would be an outcry and an investigation. The Public Accounts Committee should set up an investigation into the circumstances under which MacBrayne Haulage was privatised.
I must refer to Caledonian MacBrayne. To some extent we must welcome what is before us. We must welcome the fact that at least in that case the petty doctrinaires have had to retreat because of political pressure and, more important, because of community pressure. When faced with the prospective loss of lifeline services or the handing over of lifeline services to a seaborne Mr. Billy Walker or Stagecoach, islands people of every political persuasion


said that they did not want that under any circumstances. At that point, the Secretary of State, unusually, had to listen.
The Government went along to their tame Tory consultants and asked for a way to privatise the ferries. They asked for a solution that could be put as credibly, if that is how we can describe the Secretary of State's comments tonight, as the selling off of the buses.
My hon. Friend the Member for the Western Isles has established that the cost of the Pieda report was £20,597. Frankly, the Government might just as well have thrown that little dose of public money in the Minch. The Pieda report provided the Government with a few options, but even by their standards, the Government realised that they could not get away with the recommendations. Of course the Government had to cover up their embarrassment over the report and the climbdown on privatisation of ferries.
A continuing threat hangs over two of the services, Gourock to Dunoon and Wemyss bay to Rothesay. The arguments about that should perhaps be left to another evening because those routes will not be affected in the near future and we hope that they will not be affected at all. However, it is nonsense to continue to talk about privatising two of the more economically viable routes within the CalMac network. The only ground for privatising them is that they are reasonably economically viable. However, the inevitable corollary of privatising viable routes is that the less viable routes would require more subsidy because they would have lost the balancing factor of the Clyde services. Alternatively, the level of service would diminish.
If the Clyde services are taken out of the public sector and the integrated Caledonian MacBrayne company, the result will be a diminution of service through the rest of the network or an increase in subsidy from the public purse. Why should the Secretary of State wish to go down that road? If the Government try that, they will receive the same response that they received in the early 1980s when they tried to privatise the Gourock-Dunoon route. Hell hath no fury like Tory ladies on the Clyde when they are threatened with the prospect of standing on a pier waiting for a ferry that does not come on a wet Tuesday in February. I believe that it was the former Member, Mr. Michael Ancram, who went to Dunoon on that occasion.

Mr. Donald Dewar: The Secretary of State was in charge.

Mr. Wilson: It was the Secretary of State. Well, whichever Minister it was, he retreated in some disarray and I do not fancy the chances of the present Under-Secretary of State for Scotland against the Tory ladies on the Clyde coast.
Arising from the proposal to privatise the routes in future is the proposition that the headquarters of CalMac should be moved away from Gourock. We should not prejudge that idea in advance of reasoned debate. My hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) will deal with that matter. The headquarters have been built up over 20 years and 110 people are employed there. Why on earth should they be uprooted? If one is sitting in Barra or Stornoway, the headquarters of CalMac are at the end of a telephone. It does not greatly matter where the headquarters are

located. If on the other hand one is sitting at the end of a phone in Arran, Rothesay or Dunoon, it is no greater convenience to have the headquarters moved to Oban. That must be considered and unless there is a very good reason for change, which I have not yet heard, matters should be well left alone.
This Bill is petty. It will not rock the firmament of society. It is an irritant and it will provoke insecurity. It improves nothing. We will try to improve it in Committee, but we weep for the fact that valuable, legislative time on Scottish affairs, which could have been used to better the living standards of the Scottish people, will be frittered away on this ideological nonsense which is unasked for and unwelcome.

Sir Hector Monro: If the past 40 minutes are an indication of the new furious forty-niners, for goodness, sake bring back the hon. Member for East Lothian (Mr. Home Robertson). We have heard a tirade about nothing, and if ever someone was trying to stir up the reason for a three-line Whip on a Bill that is patently required by the Scottish public, the last 40 minutes of sheer boredom show just how far from reality the hon. Member for Cunninghame, North (Mr. Wilson) has strayed. As the Opposition Front-Bench spokesman, he must bear in mind his responsibility for parliamentary privilege and not make comments about companies and individuals unless he is absolutely sure of his facts. Hon. Members have always been very careful not to breach parliamentary privilege when they are on the Front Bench.
I welcome the Bill, and I believe that the majority of the people in Scotland will also welcome it. We all know that rural and urban public transport is extremely important in Scotland. To most, of course, it means rail and bus transport. Many, as the hon. Member for Cunninghame, North admitted, have private motor cars. We welcome that and it shows the improvement in the quality of life throughout Scotland. To many, that transport means ships or ferries. It also means transport by air where that is appropriate.
The Government's actions about CalMac were right. They are also right to demand better services with more acceptable timetables than at present. We want more convenient timetables. Heaven knows, it is difficult with the island services to provide that. However, if we are to develop tourism and industry in the inner and outer islands, we must have more convenient services than at present.
Tourists may want to visit an island for a day. They may want to visit Rhum, Eigg or Canna. It is particularly difficult to visit such islands, do something and come back the same day.

Mr. Sam Galbraith: Rubbish.

Sir Hector Monro: I have been and tried. I know that it is not rubbish.
It is right that my right hon. and learned Friend the Secretary of State for Scotland should set as his target much higher standards and better services and facilities than we have at the moment—[Interruption.] I wish that the hon. Member for Strathkelvin and Bearsden (Mr. Galbraith) would stick to his own Front-Bench responsibilities, about which he seems to know very little.


I note and welcome what my right hon. and learned Friend has said about the amount of investment in CalMac since 1979—£422 million. His announcement about Vatersay tonight shows his determination to help all communities of whatever size. I am sure that he will help that island and particularly the movement of stock, which has been so difficult in the past.
My right hon. and learned Friend was right to proceed in the way that he did in relation to CalMac because that is a socially necessary service and difficult to run at a profit. He must move with caution until the situation is right to take further steps forward.
The Bill does not cover air transport, although in a broad sense that is Scottish transport as well. The privatisation of air services in Scotland has been valuable, and we have a better and more competitive timetable as a result.
Rail and bus services are most important to those wanting public transport. British Rail has been subjected to a great deal of criticism. An all-party group of hon. Members and representatives of trade unions in south-west Scotland and Ayrshire had satisfactory discussions with British Rail and local authorities, and the rail service is now very much better than was anticipated a year ago. With the new sprinters and other improvements, British Rail has shown its determination to provide the British commuting public with a better service. We should not constantly slam it when it is trying to improve its service and, indeed, is meeting with some success.
The hon. Member for Cunninghame, North had only miserable criticism to offer the House. Had he listened to my right hon. Friend's statement on investment in roads during recent years, he would appreciate that it is very substantial. It includes preparations for the completion of the M74—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I know that we have a wide debate on Second Reading, but I remind the hon. Gentleman that there is nothing in the Bill about British Rail or about roads.

Sir Hector Monro: With respect, Mr. Deputy Speaker, buses cannot run without roads.

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman does not intend to start a debate on middle eastern oil supplies.

Sir Hector Monro: That is 15-all.
The Bill is an important step forward in an integrated transport system. There will be greater competition and a greater variety of routes and buses, from minibuses to double deckers. The school system will have a greater choice of buses with various carrying capacities.
There has been a great increase in mileage since deregulation. Services have been improved, yet they are being provided at a lower cost. That is the best of both worlds. My right hon. Friend is right to transfer ownership of the Scottish Transport Group to a selected group of companies. He has decided how the groupings should operate. I note with interest that Dumfries and Galloway —currently run by Western—are to be linked with Clydeside. That will give us 750 buses and about 2,000 employees. It should be a thoroughly valuable operation and well worth the great interest in both areas being shown in a management-employee buy-out.
I note from the local newspapers that the area manager in Dumfries, Mr. Bill McGowan, is "happy with the proposals." Mr. George Watson, the general manager in Clydeside, said:
We could be bigger than ever.
The 210 employees in Dumfries have been putting aside part of their wages towards a management-employee buy-out. They, together with those employed in Clydeside, hope that the headquarters will be at Kilmarnock, which was the centre for Western for many years. The management and the employees have a positive wish to be involved in future operations and are keen to be involved in a buy-out.
I have written to Western offering to help in any way that I can. I shall pass on information from my right hon. Friend about his preparations to ensure that the employees have the necessary information on how to proceed towards a management-employee buy-out. Such local enterprise will be warmly welcomed in Scotland.
It was wrong of the hon. Member for Cunninghame, North to hint that privately operated buses might be less safe than the current Scottish Transport Group buses. He knows that the Scottish traffic commissioners and the police would be extremely concerned if any of the regulations were breached by any bus company, of whatever ownership.

Mr. Wilson: The hon. Gentleman must recognise that my remarks were about a possible threat to safety, and I stand by what I said about competitiveness on the roads. Anyone who has driven on a Scottish trunk road knows that buses shoot past each other at very high speeds. My concern has nothing to do with party politics; it is simply concern about road safety because of the way in which those buses are driven.

Sir Hector Monro: Is the hon. Gentleman implying that buses owned by the Scottish Transport Group are being driven at slower speeds than those of individual operators? He certainly gave the impression that the safety record of Stagecoach was not as good as that of other companies. I dispute that. I have no interest in or knowledge of Stagecoach, other than that it is a jolly good Scottish company that is doing very well. Indeed, it runs a company in Cumbria, and I understand that that is working satisfactorily. Opposition Members are opposing a thoroughly good Bill. The hon. Member for Banff and Buchan (Mr. Salmond) likes throwing stones in glasshouses when he is here and the other 71 Scottish Members are not. He is not here tonight to debate an important Scottish Bill. He should be careful about his comments, because they do him no good.
My right hon. Friend made it clear that the pensions of all those involved would be guaranteed. I hope that in Committee we can discuss why bus complaints are dealt with by the Scottish Consumer Council rather than the Transport Users Consultative Committee. It would be better if complaints about buses were handled by the consultative committee. The bus aspect should not be hived off. It would be better to have all the transport complaints under one umbrella which would benefit the passengers.
I give my right hon. Friend 100 per cent. for introducing the Bill. I wish it a speedy passage through Committee. I should be surprised if the Opposition did not realise their mistake in opposing the Bill on a three-line Whip. The Scottish people are looking forward to its success.

Mr. John McAllion: The hon. Member for Dumfries (Sir H. Monro) showed no little irritation about a three-line Whip for this Bill. I can guess the reason for that, and it is not because of the nature of the Bill. Like me, the hon. Gentleman is an office bearer of the all-party Scotch whisky group. The Scotch Whisky Association is holding an event this evening in Half Moon street and we have been invited to partake of Scotch whisky. The hon. Gentleman and I would have liked to take advantage of that invitation, and I am sure that that is the reason for his irritation.
The Bill deserves to be debated fully and should be opposed because, ultimately, it can only damage the comprehensive nature of the public network in Scotland. I will certainly argue that the Bill should not be given a passage through the House but should be opposed.

Mr. Nicholas Bennett: Is the hon. Gentleman trying to explain that the reason why only seven Scottish Labour Members are present is that they are all at a Scotch whisky reception?

Mr. McAllion: Only two other Scottish Members received an invitation to the reception. Scottish Members will be elsewhere doing their work, as they always are if they are not in the Chamber.
This is not a major Bill in terms of size. It has only nine pages and 18 clauses, and no schedules. But it is major in terms of its impact on a neglected area of Government policy, and that is the important area of public transport. It is neglected because whereas the Department of Transport has no fewer than 1,200 people employed on its road building programmes—the hon. Member for Dumfries referred briefly to that when he boasted of the Government's extensive road programmes—only 120 people look after the Department's strategic responsibilities for public transport. That ratio of 1,200:120 of civil servants responsible for roads and private vehicle users to those responsible for public transport works out at exactly 100:1, which reflects the importance that the Government attach to public transport and explains why they can introduce a Bill which can only damage public transport in future.
Few people would argue with the notion that the Government seek to create a society which is more dependent on private road transport than any other in Europe. To be honest, the Government have already succeeded in doing precisely that. Whereas the people in Germany make almost one third more journeys on public transport than 20 years ago, in the United Kingdom the reverse is the case. We are making 20 per cent. fewer demands on public transport than 20 years ago.
I understand that one Minister even referred to the public transport industry as a sunset industry. I do not know exactly what he meant by that, but I assume that he means the same as Ministers who refer to shipbuilding, car manufacturing and heavy engineering in the same terms and that decent public transport will become a thing of the past if the Government have their way. It will decline into a skeleton service designed only for the unfortunates who cannot afford the convenience of a private motor car. It is certainly true that recent Government action has brought us perceptibly closer to that sorry scenario.
Perhaps this is not the time or place to talk about the merits of bus deregulation since 1986, but far from

reversing or even halting the long-term decline in public transport, the number of bus passengers, as distinct from vehicle mileage or bus operators about which the Secretary of State boasted, has continued to fall in the first year after deregulation, as the Scottish Consumer Council has pointed out.
The immediate impact of deregulation on the Scottish Transport Group was to force the company to cut its bus fleet, to close its engineering and depot facilities and to issue redundancy notices to hundreds of staff. Those are hardly the measures that can be associated with reviving an ailing industry or improving the quality and frequency of bus services. They are the undeniable consequences of opening the bus industry to the operation of free market forces.
That is the central question that divides us on the Bill. The Government insist that the answer to reversing the long-term decline in public transport and to improving the quality and frequency of services is privatisation and letting the market rip. We in the Opposition have the certain knowledge that these measures must damage the quality and frequency of services and will ultimately threaten the survival of a national public transport network.
I should like to set out some of the arguments which have persuaded me that it is important to oppose the Bill. There is the question of improving services to customers. In my area the bus market is dominated by three major companies. I live in Dundee in Tayside region and the three major operators are Stagecoach, the Perth-based company much beloved by the hon. Member for Tayside, North (Mr. Walker), the regional council's public transport company and Strathtay, which is a local subsidiary of the Scottish Bus Group. Together they account for more than 80 per cent. of bus services in Tayside. Some 30 smaller companies operate the remaining services. It is difficult to conceive of any of those 30 minnows mounting a serious challenge to the three major companies. Only Stagecoach is in the private sector, which explains why it is the one so beloved of the hon. Gentleman.

Mr. Bill Walker: I hope that the hon. Gentleman understands that I was reacting to attacks on a company which provides a good service in his constituency and mine. I feel just as strongly about Strathtay, which is also a good company.

Mr. McAllion: The hon. Gentleman has warm remarks for Strathtay, which he expects to be privatised in the near future, but he makes no reference to Tayside public transport which used to employ him as a bus driver. That is regrettable and I hope that he is equally enthusiastic about the public service. I will happily give way now and allow him to praise Tayside public transport for its service to the people of Dundee.

Mr. Bill Walker: The hon. Gentleman will be aware that there are still people working in the Tayside transport company whom I knew as a young man. I have no hesitation in saying that they and those who run it have done a good job. No one has ever heard me criticise them.

Mr. McAllion: For once, the hon. Gentleman is talking sense.
There is no realistic prospect of the 30 small companies mounting any serious challenge to the three major


companies. Since each of the major companies concentrates largely on its own particular area of domination, it is difficult to conceive of even these three seriously competing with one another directly for any of the 80 per cent. of the services which they already control. For example, most of the local registered bus routes in the city of Dundee and in the province of the regional council's transport company are not seriously competed for by either Stagecoach or Strathtay.
I cannot see the case for arguing that privatisation of Strathtay will significantly add to the competition between bus companies in Tayside or that it will lead directly to the improvement of local bus services. Strathtay already stands in a competitive relationship with Stagecoach and the public transport company. The privatisation of Strathtay will do nothing to alter that relationship. The only difference is that while Strathtay remains in the public sector it cannot be subject to any takeover by another private sector company, whereas post-privatisation it will be subject to such a takeover.
That is the only major difference arising from this privatisation measure, and it is an important one. The locally led bus company, which was much praised by the Secretary of State, will now be vulnerable to takeover bids either from Stagecoach in Perth—that would lead to a near-monopoly in Tayside and would, I hope, be unacceptable to hon. Members on both sides of the House —or from outsider companies such as the cash-rich predators from the south, about which we have heard so much. They are looking for rich pickings and quick profits in the Tayside area.
I can see no gains in improved services as a result of the Bill. The reverse is more likely. I quote from a document issued by the local management and employees of Strathtay. It says:
We fear that where ownership could pass into other hands, then there would be a significant likelihood that profit maximisation would become the overriding objective, to the detriment of bus services on Tayside, and to the detriment of bus users on Tayside.
Those people are correct to fear that happening in the aftermath of privatisation.
Where a commercial bus service is being run, a continuing and careful balancing act between the available resources of the company and customer demand for the service has to be performed. After the deregulation measures in 1985, no one is immune from such pressure, even the regional public transport company. As a result of these commercial pressures and the withdrawal of cross-subsidisation by the Government, one of the bus services in my constituency has had to be re-routed. That led to an outcry from the residents in the affected area, who saw a serious deterioration in their bus service as a result of the introduction of free market principles to the running of bus services.
While the bus companies are locally owned and managed by people with a real commitment to the local bus industry and its users, incidents of this kind will be kept to a minimum. What will happen if the bus company is owned from outside, and there is no real commitment to the needs of the local people? What will happen if local bus operations are viewed solely as a means of maximising profits, or as assets that are ripe for stripping when the profits no longer flow? What will happen when investment is seen not as a guarantee of securing a future for expanding bus services but as something to be kept to a

minimum because it interferes with profits? What will happen when staff reductions and significant fare increases are seen not as defeats but as victories for the free flow of market commercialism? There will be a gradual decline in the frequency and quality of public bus services in areas such as Tayside.
If the Minister is sincere in saying that this should not happen, he must take the necessary steps to prevent the realisation of the one potential major development for which the Bill provides—the takeover of a locally based indigenous Scottish Bus Group by cash-rich predators from outside the area where the group is located. That such a threat exists is certain.
Bus Business has already been referred to several times. It is a management fortnightly publication for those in the bus and coach market. In an article last August, it gave detailed information of a new group with the acronym SEBIL, which stands for the South East Bus Investments Ltd. This consists of five former National Bus Company subsidiaries that have been privatised under management buy-outs and taken over by outsiders. They freely admit that they have come together to combine the resources of the member companies and to take advantage of future bus industry privatisations, including that of the Scottish Bus Group. Their clear aim is to make acquisitions as opportunities arise and if the Bill becomes enacted in this form, those opportunities will arise in areas like Tayside. If the hon. Member for Tayside, North wishes to see indigenous Scottish companies remain as they are, he should take that on board and be wary of it.
In the same edition of Bus Business, it was revealed that Mr. Robert Beattie, who happens to be the chairman of a group known as Frontsource, and who has already purchased several National Bus Company operations, is now preparing to bid for parts of the Scottish Bus Group. These examples show that southern England-based conglomerates are forming with a view to cashing in on the privatisation of the Scottish Bus Group. Many of them have already acquired, via management buy-outs, not employee buy-outs, National Bus Company subsidiaries at 50 or 60 per cent. of asset value.
It was strange to hear the Secretary of State insist that, if there were to be successful management-employee buy-outs, their bid must be commensurate with the asset value of the companies for which they were bidding. In the National Bus Company in England, the management groups, which had no employee participation, were given the assets at half their face value—give-away prices, knock-down prices—but that is not to be the case in Scotland. That speaks volumes for the different treatment handed out to the Scottish management-employee buy-outs.
These predators now have large cash reserves and borrowing powers and those pose a real threat to the continuing independence of the Scottish bus service. If the Secretary of State was serious in saying that the Bill provides a basis for creating a vigorous new Scottish companies, he has to address himself to the threat posed to those companies by the home counties-based predators.
It is not enough to promise financial assistance to management employee teams. It seems strange that, in the event of a management-employee team retaining professional advice and spending up to £75,000 on it, and in the event of its bid failing because, for example, a member of South East Bus Investments Ltd. is successful, the Secretary of State will return to the failed bidders


£48,000 of their own money. That hardly compensates for losing control of their own company and being prey to whatever comes into the minds of the predators from the south who have taken it over. The Secretary of State has not in any sense provided the kind of guarantees we sought.
It is not enough for the Secretary of State to say either that he wants to give preference to bids from management-employee teams. Wanting to give them preference is very different from actually giving them preference. The Secretary of State said nothing to suggest that he will do that. He must guarantee that, if management-employee teams can put together a financial package commensurate with the value of the public assets involved, he will not sell those teams and their companies down the river and allow the companies to be sold to a higher bidder elsewhere.
The other evening, I was reminiscing with my hon. Friend the Member for Dundee, West (Mr. Ross) about the days before the Scottish Bus Group was formed, and even before the old Alexander buses were brought into public ownership. He reminded me how hard were those times for the employees, who worked long hours for low pay and were constantly under threat of dismissal for offences as trivial as leaving a top shirt button undone.
When the companies came into the public sector, there was created the strength that comes from the joining together of workers from all over Scotland employed in the newly nationalised industry, which put an end to that particular brand of management bullying. Everything improved—wages, working conditions and the way in which employees were treated by management. The hon. Member for Tayside, North acknowledged the truth of that. He worked for the Dundee corporation bus group in the public sector and was given fair treatment as well. Those improvements were secured by combining with other bus workers throughout Scotland, usually through the Transport and General Workers Union.
The Bill worries me because it will divide the workers. Employees of other individual companies may no longer be seen as allies but as a threat to one's own job because they are competing for whatever services are provided locally. What is euphemistically called the right of management to manage, really means the right of management to impose upon workers conditions that they do not want. Rather than be fought against by workers collectively, such impositions may be slowly but surely conceded by workers in individual companies in competition with one another. I hope that I am wrong, and that the unions will be able to hold the line and to resist any deterioration in wages and conditions of service. Experience suggests that whenever there is privatisation there quickly follow cuts in wages and poorer working conditions for those workers involved.
Our votes will not be sufficient to prevent the Bill receiving its Second Reading tonight or to stop privatisation. However, I hope that the Minister has listened, and that he will respond to the need to protect the local character of the newly formed private companies and the Scottish character of those companies. I hope also that the right hon. Gentleman will recognise that the companies must remain indigenous, Scottish-based

companies and that the only way of achieving that is by guaranteeing genuine preference to management-employee group bids such as in Strathtay and Tayside.
My hon. Friend the Member for Cunninghame, North (Mr. Wilson) made it clear that the Bill pays lip service to that concept, in the hope that the Government will be able to clothe what it is that they are really about with a measure of credibility. However, in a free market environment, without providing genuine safeguards against predators from elsewhere, the Bill can have no credibility. It represents a sell-out of the interests of the Scottish people and of the Scottish bus industry, and it should be opposed by every right hon. and hon. Member who is against such a sell-out being enforced against their wishes.

Mr. Bill Walker: I congratulate the hon. Member for Dundee, East (Mr. McAllion) on a thoughtful speech that clearly conveyed to me his genuine concern about what may happen. I accept that he is genuinely concerned, and it may surprise him to learn that in some respects, his views and mine are not very far apart. I contrast the quality of his speech with the appalling contribution by his hon. Friend the Member for Cunninghame, North (Mr. Wilson).
At this point, I must declare an interest. I have been talking to the Strathtay people. Neil Renilson, the director and general manager, happens to be a constituent of mine. I have conducted meetings with him and the employees and we have gone, fairly extensively, through their concerns. I have been interested in the genuine feeling among employees of wishing to become at least part-owners of the new company in future. That is very encouraging because I, like the hon. Member for Dundee, East believe that if there is to be competition on Tayside, we should not be served well if Strathtay were taken over by Stagecoach.
Incidentally, I have also been involved in meetings with Brian Soutar and Anne Gloag. The comments made by the hon. Member for Cunninghame, North were way off the mark and he was using parliamentary privilege from the Opposition Front Bench, unlike his hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who is very careful about what he does on the Front Bench. He is never slow to criticise properly what he does not agree with and he is never slow in putting forward his views, but he does not use parliamentary privilege to name people in matters on which the depth of his knowledge is obviously so scarce and superficial that it can be very damaging. All that the hon. Member for Cunninghame, North had to say was a quote by a manager who did not work for Stagecoach, and that is appalling.
Stagecoach is a Scottish company and a big employer, which also employs many people in England. More importantly, it has operations based in my constituency, where the two directors live and work. I found it interesting that the hon. Gentleman brought up the old horny myth of Canadian money. If he had bothered to do any research, he would have discovered that the so-called Canadian money came in an initial loan from an uncle. There is nothing odd about that and the loan has long since been repaid.
That is an important point and I find it disturbing that the hon. Gentleman's comments suggested that


Stagecoach was somehow unfit to be a good employer. Is the hon. Gentleman aware that, at this very moment, negotiations are at an advanced stage and an employee shareholding scheme for all Stagecoach employees will be announced any day? Such schemes are carried out in enlightened companies and we should encourage them, not criticise them.
I may have views on the difference between the public and private sectors. However, if the hon. Gentleman is an honest man, he must accept that some parts of the public sector are not run as well as he or I might wish. I have been very critical of some aspects of the private sector. You will realise, Mr. Speaker, that I was not slow to say what I felt because I felt strongly about it. That led to prosecutions being brought. If the hon. Gentleman feels strongly about a matter and has hard evidence, he should use that evidence, but he should not use parliamentary privilege as he did.

Mr. Wilson: If the hon. Member for Tayside, North (Mr. Walker) is to continue in this bumptious vein, giving a patronising lecture on parliamentary privilege, will he point out one comment I made that comes within the category he is trying hard to define?

Mr. Walker: When he reads Hansard, the hon. Gentleman will realise that he made such comments. I am also concerned that there are some differences in attitude on the Opposition Front Bench about their basic policy. They tell us on one hand that it is important where a company's headquarters are located, yet the hon. Member for Cunninghame, North then tells us that it does not matter where the headquarters of a particular group are because, after all, that group is at the end of a phone. They cannot have it both ways.

Mr. David Marshall: It is unlike the hon. Gentleman not to respond fully to the questions put to him, and I do not think that he responded fully to the question put to him by my hon. Friend the Member for Cunninghame, North (Mr. Wilson). Can he specify exactly what my hon. Friend said about Stagecoach that involved parliamentary privilege? I thought that my hon. Friend merely spoke the truth, and I do not think that anything in his remarks would need to be covered by parliamentary privilege.

Mr. Walker: No doubt the hon. Gentleman will read Hansard tomorrow. I shall invite the hon. Member for Cunninghame, North to repeat outside the Chamber exactly what he said today. I think that that is all I need to say. [HON. MEMBERS: "What did he say?"] Hon. Members can read Hansard tomorrow.

Mr. Hood: Is the hon. Gentleman referring to an implication by my hon. Friend that Stagecoach had been prosecuted? Is the hon. Gentleman aware that the company has been prosecuted on at least three occasions?

Mr. Walker: I did not specify that the company had been prosecuted; the hon. Member for Cunninghame, North did. He named the directors of Stagecoach and then gave his views and comments. He cited as his source and authority a manager who was not working for Stagecoach. I am merely saying that one should be very careful, and that Front Bench spokesmen have special responsibilities. I was watching the expression on the face of the hon.

Member for Garscadden while the hon. Member for Cunninghame, North was speaking. But we can deal with these matters when we read Hansard tomorrow.
It is interesting that the hon. Member for Dundee, East and I should share such concerns. It would not be right for Strathtay, for instance, to be purchased by Stagecoach. That would not be good for competition in the hon. Gentleman's constituency or in mine. We should certainly be united in our views on that. If we are to have competition, we must have real competition, and he and I know that we now have competition, with the three large companies. All three companies have served Tayside well and I hope that they will continue to do so.
Too often, the Opposiion have overlooked the fact that this is a unique opportunity for employees to become shareholders in the company in which they work. There is a big difference between being an employee of a locally run, local authority-owned concern or of a nationally run concern owned by the public purse, and being an employee of a private company in which one can improve one's position by constantly improving one's shareholding. Companies operating such schemes find that they aid motivation and the smooth running of the concern.
More important, such a system gives employees a say at the annual general meeting, which someone working for a concern run by the local authority, by the Government or by a quasi-governmental body never has. There is a big difference, and that is why I welcome the statement by my right hon. and learned Friend the Secretary of State that we shall be encouraging employee-management buy-outs and placing emphasis on the employee. I hope that the employee-management buy-outs succeed everywhere, but if they do not, I hope that consideration will be given first to Scottish-based companies and secondly to companies that have an employee shareholding scheme. We shall thus increase employee participation and shareholding, which all hon. Members would want us to do.
I am sure that the people of Scotland will welcome this Bill, just as they have welcomed many other Bills on which the Opposition have voiced doctrinaire objections. More important, the employees in the industry will welcome the benefits that will accrue to them which did not exist under the previous arrangements.

Mrs. Ray Michie: If we must have bus privatisation in Scotland, I support the management-employee buy-out option. I believe that it is the only way to ensure commitment and a standard of service. I welcome the Secretary of State's assurance that the Government will assist staff contemplating a bid to obtain professional and financial advice, provided that that is timely. It is crucial that a realistic preference be given to management-employee bidders rather than to the highest bidder. I hope for something similar to the sale of the National Freight Corporation, which was sold to the employees at a discount.
The Minister referred to consideration for preferences, and mentioned one or two. I urge him to give consideration to a company that is prepared to say that it has a "public service" or "social" commitment to, for example, a less-populated area.
The entire exercise would, I feel, become null and void unless the Secretary of State took residual powers to stop a large predator company from buying up all 11 newly


privatised companies. Whether the company was Stagecoach, Icarus or any of the others, that would make nonsense of the whole enterprise. Despite what was said by the hon. Member for Cunninghame, North (Mr. Wilson), I consider it important that a Scottish company should be involved, rather than one south of the border.
Alternatively, perhaps the Secretary of State could set up a commission to which any takeover must first be referred. But unless he is able to provide real reassurance the exercise makes no sense. If the aim of privatisation is, as the Bill claims,
to promote sustained and fair competition",
he must take note of the experience of England and Wales, which has led not to sustained competition but to natural monopolies, with the larger operators buying out the smaller ones and often driving them out of business.
Recent press reports suggest that competition is being affected by price-fixing deals and agreements to end competition. Sir Gordon Borrie, Director-General of Fair Trading, has found 115 cases of firms that are believed to be colluding to restrict competition in the wake of deregulation. Some are said to have arranged timetables to avoid competition, and others have fixed common fares. How will the Secretary of State stop that happening in Scotland?
Can the Minister also give an assurance about bus stations? If the Government's aim to promote competition is genuine, they must ensure that bus stations are not sold to one company. If there is not a station for all to use, the reliability of services is affected. Competing operators must surely be able to use a central base.

Mr. Nicholas Bennett: rose—

Mrs. Michie: If the hon. Gentleman does not mind, I shall not give way. I have been accused before of giving way too often and then speaking for too long. [Interruption.] No, I will plough on.
There is a great fear about the future of rural services. I know that very well from my part of the country. Many people do not have cars and may find themselves isolated —as, indeed, they often do now. They are on the unprofitable routes. What does the Minister advise? If privatisation of the bus company will not improve the service to those people, what is the point? How can the Minister visualise an integrated transport system with bus meeting train, ferry or plane and through-ticketing systems covering the different forms of transport that have to be used on one journey? That will be difficult to achieve with all-round privatisation.
Will the Minister give an assurance that there is no hidden threat to rural railway lines in the north and west of Scotland? It was reported recently in the press that British Rail had produced a document that was supposed to show how routes could become more cost-effective. I am suspicious of that document. It contains a list A and a list B. List B refers to the rural routes of Ayr to Stranraer, Helensburgh to Oban, Helensburgh to Fort William, Aberdeen to Inverness and Inverness to Thurso. Is there some secret strategy to replace those lines with buses and is it all in preparation for the eventual privatisation of the railways?
Obviously, I must say something about Caledonian MacBrayne. I have said before and I say again, quite

unashamedly, that I welcome any move of the headquarters to Oban. I appreciate that my Scottish Democrat councillor colleagues are concerned about unemployment if the HQ moves, but I hope that the Government would do what they could to alleviate any adverse consequences.
I welcome the causeway to Vatersay. That is excellent news for the many bachelors on the island, where there are very few women left. It was becoming a serious problem because more and more people were leaving that island.
The Secretary of State referred to Uig, a terminal in Skye. The correct pronunciation is "Ooig", not "Yuig". I hope that everyone will note that, because it sounds extremely ugly when it is mispronounced.
The hon. Member for Dumfries (Sir H. Monro) referred to the fact that Caledonian MacBrayne did not have proper timetables and that it was difficult to get to the Isle of Rhum. One reason for that is because there are no people left on the island, except employees of the Nature Conservancy Council, which now owns the island. It is of considerable regret and sadness to me that this island, which used to be populated with Gaelic speakers, can now attract only tourists who come to see our white-tailed sea eagle, which has been brought back to the area, or deer or whatever else, but not the people. The tourists are interested only in the animals and flora. No effort has been made to bring back the people who were cleared out years ago. That is cause for concern.
Caledonian MacBrayne's new board ought to be properly balanced. It should not consist solely of business men, accountants and a token islander. The majority of board members should come from as many islands as possible. They should include those with expertise in running a shipping line or a ferry service. It is essential that the board should genuinely represent the areas that it serves. It should not be peopled by characters who never set foot on a ferry unless they are going to the islands for their summer holiday.
It is wrong to limit the share of the surpluses that can be retained, with the balance having to be repaid to the Secretary of State. If the company does well, it should be allowed to reinvest the surplus, without a consequent loss of subsidy.
The Bill singularly omits to provide any assurance that islanders will be protected from having to bear the full cost of running the service, through increased fare and freight charges. I ask the Minister to think again about the road equivalent tariff—the RET. It works well in Norway, where fares are cheaper than in Scotland. The road equivalent tariff is flexible. Contrary to what the Secretary of State said in his statement a few days ago, a flexible RET system would include a distance element, whereby the longer distance ferry routes would not be penalised. The people in the north and west of Scotland want a flexible RET system.

Mr. William McKelvey: I have listened carefully to the hon. Lady, and what she has said is absolutely correct. Those were the findings of the Select Committee on Scottish Affairs. The reason why these matters are totally overlooked by Conservative Members is because that Committee no longer exists.

Mrs. Michie: I thank the hon. Gentleman for pointing that out. I should also mention that it had been this Government's intention to introduce the road equivalent tariff, but they walked away from it and discarded it.
It is essential that high standards of safety should be maintained. When a boat comes to the end of its working life, it must be replaced by a new one. We do not want to be fobbed off with second-hand vessels. We have been fobbed off with old rolling stock on the railways. Time and again we were fobbed off with old rolling stock from the midlands. It is absolute rubbish; it breaks down, day in and day out. We do not want the new Caledonian MacBrayne board to introduce such a policy. As for the buses, without firm guarantees about employee buy-outs, fair competition and opposition to a large private monopoly, the competition exercise will be a complete nonsense.

Mr. Nicholas Bennett: I am delighted to take part in this debate on the Bill, especially as I am the joint secretary of the Conservative party's Back-Bench transport committee. I have taken an interest in the bus industry for nearly 30 years. I am a subscriber to the main magazine that is issued for the bus industry, and I am a member of a transport study group. I have taken a great interest in the deregulation and privatisation of bus services in England and Wales and in what has happened in Scotland as a result of deregulation.
I had a feeling of déjà vu as I listened to the speeches of Opposition Members, especially having read the reports of debates on previous transport Bills. It is worth referring to what Opposition Members have said about these transport Bills that were introduced by this Government. There was a debate in 1979 on what became the Transport Act 1980. In that debate, the hon. Member for Glasgow, Shettleston (Mr. Marshall) said:
In five years' time nothing will remain of the existing public transport system. There will be a substantial loss of jobs in the transport industry."—[Official Report, 27 November 1979; Vol. 974, c. 1218.]
I welcome back to the Chamber the hon. Member for Shettleston. He is in time to hear one of his own quotes. Five years on, far from the industry collapsing, there had been a 40 per cent. increase in patronage of express coaches, fares had fallen sharply and the number of express services had increased. That was the result of the Transport Act 1980.
When he spoke in the debate on what became the Transport Act 1985, the hon. Member for Shettleston had the good grace to admit that he had been mistaken in 1980, but he continued on the basis of a gambler trying double or quits when he said:
Privatisation will be a disaster for the bus industry."—[Official Report, 12 February 1985; Vol. 73, c. 237.]
We now know what has happened as a result of deregulation. The number of bus miles has increased by 13 per cent. and the number of routes has increased. There are 400 more bus operators and operating costs have been reduced. The Transport and Road Research Laboratory report on the first year said that deregulation of bus services had been an immense success.
When I tried to intervene in the speech of the hon. Member for Argyll and Bute (Mrs. Michie), I did not want to be unhelpful. I wanted to make a point about bus stations. After deregulation, when a bus company tried to bar other operators from using a bus station—I believe

that it was in Southampton—the Monopolies and Mergers Commission did not allow the ban because our legislation was strong enough to oppose such monopoly. The hon. Lady can rest assured that any bus operator who wishes to use a bus station is entitled as a result of that ruling to use it.
The hon. Lady also mentioned a report in The Guardian of 8 December which said that 36 rail lines face the axe. I also read it and felt some anxiety as it mentioned the Swansea-Milford Haven line. I have tabled a question to my right hon. Friend the Secretary of State for Transport to establish the status of those plans and to see what we can do about them.
When I intervened in the speech of the hon. Member for Cunninghame, North (Mr. Wilson), I mentioned the Bus and Coach Council conference at Eastbourne this year. The theme of the conference was, "Succeeding in the New World" and the magazine Buses for November 1988 reported:
it was interesting to observe how bus-industry attitudes have changed in that time. Some years ago there was much evidence of concern about the future of a deregulated and privatised industry, but now it was evident that most of the assembled delegates were enjoying the new environment and their new role of entrepreneur. This was reflected particularly in the warm reception given to the new Minister of Transport"—
my hon. Friend the Member for Enfield, Southgate (Mr. Portillo). It is clear that the bus industry has welcomed what has happened as a result of deregulation. It has recognised the exciting new ventures which it has been able to operate because of commercialisation of the market.

Mr. David Marshall: I am grateful to the hon. Gentleman for giving way and flattered that he should take the trouble to read what I said—he must be the only one.
The hon. Gentleman has produced all manner of figures to back up his argument about deregulation, but figures can be used to demonstrate all manner of things. Does he ever go out into the real world and talk to passengers or would-be passengers? My experience is that people do not know when they will get a bus in many areas and where it will take them. In my opinion—it is only that—the situation now is much worse than it was before deregulation. Deregulation has not been an advantage either to the travelling public or to employees in the industry.

Mr. Bennett: The hon. Gentleman cites anecdotal evidence. We can all do that. I also am a bus user. I went recently to Glasgow to study the effects of deregulation.

Mr. Marshall: On a bus?

Mr. Bennett: I went on many buses. Many of them were bought from London Transport and are being operated with conductors. Competition is such in Glasgow that operators now ensure that they have conductors because that is what the public want. They realise that, as a result of deregulation, they now have to compete for the public market and purse.

Mr. McAllion: The hon. Gentleman is trying to make the case that deregulation has been an unmitigated success in terms of increased vehicle mileage, and so on. Does he not realise that in Scotland, in the first year after deregulation, the number of bus passengers fell? The customers were turning from the bus industry in its


deregulated form. That is the one statistic to which the hon. Gentleman has not referred in trying to defend deregulation.

Mr. Bennett: The hon. Gentleman referred to bus passengers, and, as he knows, bus passenger usage has been falling for many years. However, using the Scottish example specifically, under deregulation there are far more services and far more operators and the passengers' choice has improved.
Let us consider the Scottish example. An article called, "Deregulated ramblings" by Alistair Douglas, published in December 1986, just as deregulation was being introduced, stated:
I am convinced that deregulation will be beneficial to both passengers and operators in the end, but many lessons will have to be learned or relearned on the way … But deregulation provides a challenge which will stretch the ingenuity of operators and there are rewards to be won".
That was a fair warning in December 1986.
What has happened in Scotland? If one goes through the pages of the bus industry's largest selling magazine Buses, and looks at the Scottish column, one sees that in May 1987
the Scottish Traffic Commissioner rejected Strathclyde Regional Council's plea to order a one-third reduction in the number of buses operating in Glasgow city centre. The Region's request had been opposed by the seven subsidiaries of the Scottish Bus Group".
They did not want a reduction in the number of buses. The Scottish Bus Group, a nationalised group, wanted that competition and wanted a fair crack of the whip, against the views of the Strathclyde regional council.

Mr. David Marshall: Does the hon. Gentleman agree that Strathclyde regional council was forced to appeal to the traffic commissioner simply because Glasgow city centre had been brought to a standstill by hundreds of buses containing no passengers blocking all the through routes of the city? Some order had to be brought into the chaos that had resulted from deregulation.

Mr. Bennett: The hon. Gentleman may say that, but what did the commissioner say?
The commissioner's decision was based on the view that the increase in buses operating in the city since last August had not been the cause of severe traffic congestion or additional danger to other road users.
The hon. Gentleman says one thing, but the commissoner says the exact opposite.

Mr. Hood: What about the rural areas?

Mr. Bennett: I shall come to the rural areas in a moment.
In July 1987, the Scottish column in Buses magazine stated:
Strathclyde Region have witnessed interesting developments in the provision of bus services, completely unconnected with the tussle between the Scottish bus Group and Strathclyde Buses Ltd, which deregulation has intensified.
It refers to Oban and the introduction of minibuses by Midland Scottish, and continues:
Further south, the Gourock, Greenock and Port Glasgow area is now the scene of fairly fierce rivalry between a number of operators which has developed since last year.
Turning to more recent editions of Buses. issued this year, the Scottish column states:

In the past few months increased competition has been experienced by Central Scottish in the Lanark sub-region of Strathclyde".

Mr. Bill Walker: My hon. Friend will be aware that my constituency covers 2,000 square miles of rural Scotland. Is he also aware that since deregulation something unique has happened? Not only has the service improved, but, more importantly, operators have been prepared to deviate from their routes to serve small hamlets that previously had never had buses.

Mr. Bennett: My hon. Friend makes an excellent point. One of the great advantages of deregulation has been the tremendous increase in the use of minibuses throughout England, Wales and Scotland to serve small communities, visiting council estates that had not had a bus service before. Not only the heavily populated areas of Scotland have experienced increased competition. Inverness has recently witnessed the full effect of deregulation.
The Orkneys are among the most depopulated and under-bussed areas in the United Kingdom. The September 1988 edition of Buses says:
In Orkney, competition which developed on a tendered route in 1986 has continued for almost two years".
Labour Members said in 1985 that that competition would not last long but would collapse as one company took over the others. The article continued:
a new bus war has just started with three operators having now registered commercial services on one of the main routes.
In Orkney—where there cannot be said to be rich pickings —there are three operators.

Mr. Hood: rose—

Mr. Bob McTaggart: rose—

Mr. Bennett: There is an embarrassment of riches before me. I shall take the point to be raised by the hon. Member for Clydesdale (Mr. Hood).

Mr. Hood: My problem differs from that of my hon. Friend the Member for Glasgow, Central (Mr. McTaggart). He has too many buses, whereas I have none. My constituency of Clydesdale, covers more than 1,000 square miles. There are rural areas where people are lucky if a bus comes every two or four hours. In parts of my constituency there is a better chance of seeing a Wells Fargo stagecoach than of seeing a Stagecoach bus.

Mr. Bennett: I cannot speak in detail about the hon. Gentleman's constituency. There has been an increase in the number of buses in my rural constituency. During the past few months, in Tenby and Saundersfoot—two of the smaller towns in my constituency—minibuses have been operating in new estates which previously had never seen a bus. Wherever we look, whether in Scotland or in England and Wales, deregulations has produced new ideas, new buses and minibuses.

Mr. Jimmy Dunnachie: Glasgow, Pollock had a fair bus service until deregulation. A tour which used to take half an hour to reach Paisley now takes an hour. Buses used to travel at 10-minute intervals to each part of my area. How can the hon. Gentleman defend what has happened, when people have lost their previous service and now have a lesser one?

Mr. Bennett: The hon. Gentlemansays that the buses now visit all sorts of areas. That sounds as though they


visit streets that were never previously served by buses. The hon. Gentleman knows that I believe in the market. If there is a market for bus services, a commercial, privatised bus service will provide them. Companies are kept in being by attracting customers.

Mr. Dunnachie: On a point of order, Mr. Speaker. The hon. Gentleman says that the bus companies do not have to provide a service to people in the area—

Mr. Speaker: Order. That is not a point of order, although it may be a point of disagreement.

Mr. Bennett: Another interesting statistic has resulted from deregulation and privatisation in England and Wales. The number of vehicles built has increased. In recent years, there have been serious problems with the construction of new vehicles. I am glad to say that, because of privatisation, the number of minibuses built has increased. I pay tribute to the new companies which have come on to the market, especially Optare, which seems to run minibuses all over London as well. According to the latest edition of the bus industry's journal, there has been a large increase in the number of large vehicles built for use by bus services. We are seeing the regeneration of the bus industry throughout the United Kingdom and should welcome that as one way of providing new jobs and new services for the public.
The privatisation of bus companies in England and Wales over the past two or three years—

Mr. Dunnachie: Disaster.

Mr. Bennett: The hon. Gentleman shouts, "Disaster." Of the 46 national bus companies in England and Wales which have been privatised, 26 were sold through management buy-outs.
Let me quote the example of one of those companies, Badgerline, which is a management-employee buy-out. The managing director, Mr. Trevor Smallwood, who is this year's president of the Omnibus Society, said that the Transport Act 1985 had produced competition, efficiency and opportunity. His company has been in the forefront of providing new services and going into towns which previously had a monopoly provision from another operator.
The hon. Member for Cunninghame, North, who has sadly left us, made a speech of—[HON. MEMBERS: "Excellence".] Opposition Members say "excellence". It was excellent from the point of view of those of us who wish to be able to quote in future from the speeches of Front-Bench Opposition Members and provide reasons why people should not vote Labour. The hon. Gentleman spoke about class war. If a Conservative Member spoke about class or race war, he would rightly be hounded out of public life, but, apparently, to wage war against people of a different class is respectable and should be carried on. We shall remember those remarks and ensure that they are quoted in future. The idea that there is something morally correct about waging war on people who happen to be of a different social class is a disgrace and I am surprised that any Labour Member still trots out that 1930s Communist claptrap.
The hon. Gentleman went on to say that the Labour party was against competition. We are glad to hear that directly from a Labour Member; they are usually more circumspect. The hon. Member for Glasgow, Garscadden (Mr. Dewar) would not have said anything quite as rash as

that. We are in favour of competition because the moral arguments are in favour of it. Competition and popular capitalism respond to the market. People want that market, those buses and that service.
That service and competition provide for the customer what the state has not been able to provide in the past few years. When 1992 comes, it is likely that European bus operators will have as much right to operate services in the United Kingdom as our operators will have to operate in European markets. We shall then see how well our privatised companies which serve the public are able to take on foreign competition from European operators.
I wish to quote some remarks from members of the Scottish Bus Group. It is interesting to see what Mr, Ian Irwin, chairman of the Scottish Transport Group. says. In The Scotsman of 1 December, he said:
The interest already shown by the overwhelming majority of staff clearly indicates that they will he very serious contenders for the ownership of these Scottish-based private sector companies.
The general manager of Lowland said:
We are absolutely delighted that Mr. Rifkind has accepted our strong argument that Lowland Scottish should be allowed to stand alone. Now we must convince him that a management-employee buy-out would work.
The general manager of Northern said about privatisation:
I am confident that Northern can go from strength to strength.
The general manager of Western and Clydeside said:
We could be bigger than ever.
The general manager of CityLink said:
We think we have got a good company and we want it to stay in the current hands.
Even the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said:
I am confident workers' buy-out could succeed, for if each member of staff was prepared to commit hard cash to the venture, then that, coupled with the assets like depots and vehicles, would give them a good start in trying to raise the necessary capital.
I end with a quote from a letter of 7 December from the director and general manager of Strathtay to myself. He said:
The majority of the workforce at Strathtay are very keen to participate in share ownership through the privatisation process. A Savings Scheme ws set up following Mr. Rifkind's announcement in May that Scottish Bus Group was to be privatised, and 60 per cent. of employees are contributing sums ranging from £2—£20 weekly into the fund, which will be used to buy shares if a management-employee buy-out bid is successful.

Mr. Dunnachie: That was to protect jobs.
The letter continues:
We believe that the objectives of broadening share ownership and developing the enterprise culture will be most effectively served by privatising Scottish Bus Groups Subsidiaries to management/employee buyouts rather than sale to third parties.

Mr. McKelvey: Will the hon. Gentleman give way?

Mr. Bennett: I do not think that the hon. Gentleman can ask me to give way when I am quoting from a letter.

Mr. Dennis Canavan: Give way.

Mr. Bennett: The hon. Member for Falkirk, West (Mr. Canavan) shouts from a sedentary position. As he has not been in his place for most of the debate, I shall not take his advice.
I shall finish quoting what Mr. Renilson wrote:


I believe that the privatisation of the Scottish Bus Group presents the Government with an excellent opportunity to genuinely broaden share ownership and change the attitudes of many bus company employees towards private enterprise. It would be a great shame if this opportunity were not exploited to its maximum benefit. In short the important objective is that privatisation allows for employees to become shareholders in the firm for which they directly work. That way the realities of living in a free market world and working for private enterprise business will be realised.
There can be no stronger support for the Bill than from the workers of the Scottish Bus Group, who wish to be privatised, to work for themselves and to provide a better service.

Mr. Thomas Graham: I am delighted to have the opportunity to participate in the debate. Whenever a Minister visits my constituency in his ministerial capacity, I find that a week or so afterwards further job losses are announced. There were the job losses at the royal ordnance factory and now we are faced with losses at Caledonian MacBrayne. The deregulation of the bus services in my area has brought a tremendous problem for the rural community that I represent. Bishopton people have written to the Secretary of State for Scotland to ask for an improvement to be made in their bus services. The present services are lamentable. If deregulation is a sign of success, I can assure the House that the folk of Bishopton do not like the service that they are receiving.
I find it incredible that folk can welcome the statement that has been made on Caledonian MacBrayne. I represent the area in which its headquarters is located, and I do not welcome it. I recognise that the Secretary of State can introduce privatisation, but it is abysmal that it is suggested that the headquarters should be moved from Gourock to Oban. I note that the hon. Member for Argyll and Bute (Mrs. Michie) is laughing smugly. It seems that she welcomes with open arms, with glee, the proposal to move from Gourock to Oban. She is delighted to see jobs being removed from an area which has some of the highest rates of unemployment in Scotland. It is unfortunate that some hon. Members are welcoming the removal of jobs from an area which is already denuded of employment and lying at the bottom of the pole, as it were.
I can assure the House that there were no discussions with the office workers and head workers of Caledonian MacBrayne. I made an effort to speak to them, however, and I can assure the House that none of them wants to move to Oban. The managing director does not wish to make the move. He believes that the move would be bad commercially and make an unbelievable nonsense of the organisation that Caledonian MacBrayne operates. He says:
Oban has no staff base. There are communication difficulties and housing shortages in the area.
He thinks that 20 per cent. of the present staff would not agree to move to Oban. I know that none of the staff wants to make the move.

Mr. Wilson: Does my hon. Friend agree that the only way for that to make any sense would be if the Gourock to Dunoon and Wemyss bay to Rothesay routes were excised from the CalMac network? If that is so, does he agree that the hon. Member for Argyll and Bute (Mrs.

Michie) should take the future of those routes and the interests of her constituents into account instead of simply putting her money on Oban?

Mr. Graham: I agree with my hon. Friend. The folk in Gourock and Inverclyde do not want to see CalMac split up. They want to see it in its entirety serving the islands of Arran, Rothesay and Dunoon. We do not want to see it split up. We believe that Caledonian MacBrayne is a good viable option.

It being Ten o'clock, the debate stood adjourned.

Ordered,

That, at this day's sitting, the Transport (Scotland) Bill may be proceeded with, though opposed, until any hour.—[Mr. Heathcoat-Amory.]

Question again proposed, That the Bill be now read a Second time.

Mr. Graham: My constituents do not welcome the Minister's involvement in the constituency. That means job loss after job loss. We also believe that the Caledonian MacBrayne work force has been loyal and has worked very hard to reduce the subsidy and ensure that it serves the islands. The work force gives its wholehearted commitment and dedication to ensuring that the islands receive a proper decent service.
I also remind the Minister that the headquarters contains one of the finest computer services in the country. That installation is one of the largest in the west of Scotland. My hon. Friend the Member for Cunninghame, North (Mr. Wilson) is correct. It is very easy to pick up the phone and contact the headquarters of Caledonian MacBrayne.
Caledonian MacBrayne and Gourock offer service which has been there since 1969. CalMac has provided 20 years' service to the people of the islands and there have been no complaints. There are more than 19,000 sq ft of offices and more than 19,000 sq ft of work shops, bakeries, engineering space, catering facilities and other stores, and roughly 75 per cent. of the work force live in my constituency.
The company uses local suppliers wherever possible for engineering, office and catering supplies and nearly all the overhaul work on the 31 ships is undertaken on the Clyde and involves local jobs. We are not talking about transferring 100 jobs from my constituency. The Government are threatening far more than 100 jobs.
Caledonian MacBrayne is an integral part of the Gourock area. The area needs the jobs and is desperate for them. We do not need bargaining and we do not need other hon. Members of Parliament jumping on to the weaknesses and backs of unfortunate workers. We are in Scotland to fight for jobs, not to see it denuded of them.
When the new board is set up, I believe that it will be the Government's puppet in the same way that the health boards have been. If the board does not have an opportunity to consider the commercial viability of removing from Gourock to Oban. The Gourock office offers much for the success of the Caledonian MacBrayne operation. If the headquarters are moved, the Government will do that to ensure that Caledonian MacBrayne does not operate successfully. If it does not operate successfully, the Government will sell it off to their friends in the private sector, who will strip the assets and do the business. We have had enough of asset stripping with the royal ordnance factories and we shall fight for the jobs. I hope that the Secretary of State will listen to common sense.

Mrs. Margaret Ewing: I do not intend to speak with as much vehemence as the hon. Member for Renfrew, West and Inverclyde (Mr. Graham), but I wish to raise several points of concern about the Bill.
The Secretary of State laid great emphasis on his belief in viable and sustainable competition and said that 11 units would be established throughout Scotland. He appeared to assume that because there would initially be 11 units providing a great deal of variety, there would be permanent competition based on those units. We fear that the establishment of 11 units will not be a safeguard.
The Scottish Bus Group has drawn attention to the English and Welsh examples and we do not hold out much hope that the units will operate in the way that the right hon. and learned Gentleman suggested. The Scottish Bus Group said:
The National Bus Company was split into 70 operating units which were sold off individually. But in a short time a process of acquisition and expansion led to the emergence of five largish groups … The danger is that a similar pattern would emerge in Scotland leading to increasingly competitive bus wars between such groups which would create even stronger commercial logic for the companies not to service the remoter areas.
Our deep concern is that in both the medium and long term, predators will attempt to take over the 11 units so that rather than their providing real competition we will be deprived of any competition. The history of takeovers in Scottish industry is not happy. Many companies were taken over without reference to the Monopolies and Mergers Commission and without concern for the future of the employees. We are concerned that the competitive element should be safeguarded, but there is nothing in the Bill to ensure that that happens.
If there is over-fierce competition and one group wishes to take over another, there will be a concentration on the profitable routes—which are not those in the rural communities. The hon. Member for Renfrew, West and Inverclyde spoke about the difficulties of the people of Bishopton with bus transport since deregulation. I represent villages as remote as Tomintoul and Dufftown, and the problems in my constituency are even more severe. Just as Caledonian MacBrayne is seen as a lifeline to the islands, my constituents and those of other hon. Members representing remote areas see the public service bus as their lifeline. They do not understand why they should suffer because of the Government's ideological stance.
It is important that the elderly and the poor in our rural communities should not be cut off from the basic amenities and facilities that everyone else takes for granted on their doorsteps. They have to travel vast distances to gain access to hospitals and other services. I want to ensure that my constituents are not deprived because of over-concentration on profitable routes within the city communities.
It is all very well for hon. Members to talk about the eventual arrival of minibus services, post bus services and so on, but that is little consolation for those who face major problems and the possibility of further cuts in rail services. It may be that the leaked documents, denied by British Rail, do not show a severe cut in services, but when British Rail begins to talk about cost effectiveness we must question the future for such routes as the Aberdeen to

Inverness line, which runs through my constituency. There is genuine concern about the Bill's implications for rural communities.
The Secretary of State had a great deal of fun talking about the position in Grampian. It is another example of intellectual somersaults in the Scottish Office, where one incident is somehow translated into being ideological support for the Government's activities. For example, the hon. Member for Stirling (Mr. Forsyth) this week took an opinion poll supporting parental involvement to mean support for school boards. [Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd): Order. There are a number of conversations going on in the House which show great discourtesy to the hon. Lady.

Mrs. Ewing: Thank you, Madam Deputy Speaker, for drawing the attention of hon. Gentlemen below the Gangway who have just arrived for the debate to the irritation of the noise during this important debate on Scottish legislation.
It involves an intellectual somersault to take what happened in Grampian region as proving that there is ideological support in that region for privatisation of the bus group. A conscious decision was taken by the regional councillors to safeguard the jobs of 600 employees in the area in the face of the likelihood of yet more legislation with which Scotland disagrees being railroaded through the House by hon. Members who do not represent Scottish constituents. The genuine and responsible approach taken by Grampian regional council is done a great disservice by attempts to turn it into praise for the Scottish Office and this legislation.
We are worried about the jobs of people employed in the bus industry, our rural communities and safeguarding the proposed elements of competition. We do not believe that there are enough guarantees in the Bill. We shall certainly be interested to see what happens in Committee, but, because of our basic opposition to the privatisation of the Scottish bus service, we shall vote against the Second Reading.

Mr. Jimmy Wray: To look at the Bill, I would think that the great train robbers wrote it. All it does is pass power to one person—the Secretary of State for Scotland.
Clause 1 gives the Secretary of State power to go in and take over. Clause 2 gives him power to dispose of all the assets. Clause 3 allows him to direct the Scottish Transport Group what to do. Clauses 4 and 5 enable him to transfer the assets wherever he sees fit. The shipping transfer, and even the accounts, are also his responsibility. Clause 10 gives him the opportunity to guarantee Treasury borrowing.
We are not talking about any chickenfeed. We all know that the Government are sitting like vultures, raping the land and public assets. They are ready to take anything that makes a profit. We are not talking about chicken feed when in 1986 the Scottish Transport Group had a turnover of £180 million. We are talking about a profit of £4·5 million in 1986. Then the Government introduced deregulation. They do not understand the harm that it has done. If they look at the figures hard enough the evidence is clear. The Scottish Transport Group has even stated that, since deregulation in 1987, the £4·5 million profit of


1986 has been reduced to a loss of £400,000. All the pirates and operators ganged up on it and put a stranglehold on it.
The Secretary of State has been taking advice from no one. How hypocritical his statement was when he said that he was placing an emphasis on the employees. He did not go for advice to the employees. He did not consult them. Who did he go to? Did he go to the Scottish Transport Group which did not want him to break it up? No, he sought the advice of Quayle Munro the merchant bankers, who told him that the only way to make a quick buck was by dividing the group. He was talking in February of this year about splitting it into 10 units, but he has now decided to split it into 11.
In 1984, the Government brought out a White Paper on buses, and deregulation took place in 1986. All the London buses—the scrap buses—came to Glasgow and people were falling off them in Sauchiehall street. It was impossible to get parts for them. We know of the great private company Kelvin transport, which ended up in the dust bucket with debts of £3 million.
Last week, the Evening Times let us know clearly what the private operators feel about the consumers and commuters; they refused to come out over the festive season. The Evening Times had an editorial about this, but it did not tell us anything that we did not know. These people thought that they would become millionaires overnight, but when the future of the buses was being discussed, nobody gave any consideration to the poor people from areas such as mine, where there are families with 10 children who see the town only once a month. The mother takes the children on a rota basis because she can afford to take only one or two of them at a time. That is what deregulation brought to the people of Scotland and the people of Glasgow.
We know how bad the situation is. We know that, when the Scottish Transport Users Consultative Committee gave advice to the Government, they did not heed it. The council said that deregulation, and the privatisation of bus groups in Scotland or anywhere else, would not help to improve services. Hundreds of services in Strathclyde have disappeared. All sort of strange tenders came in, and the Strathclyde bus group got its fair share of them. It then had to rescue some of the private operators who could not manage the services that they had won on tender. That is the kind of rubbish results we have had from privatisation, which never brought any good to anybody except the vultures looking for profits. The Scottish Consumer Council advised the Secretaries of State for Scotland and for Transport that services were disappearing, with the result that fewer people were using the buses.
Clauses 4 and 5 set out share schemes for employees, but the Secretary of State for Scotland did not make it clear what percentage of shares employees will get. He did not appear to understand that rural transport suffered badly as a result of deregulation. Will he make any changes when he privatises CalMac? What will happen to the 10,000 employees? Where will they go? What will happen as a result of clause 147? Who will get the big pay-offs and the golden handshakes, and what will be the cost that the taxpayers will have to meet? I hope that, after tonight, the

Secretary of State will have a rethink, and will bring to a standstill the privatisation of the Scottish people's public assets.

Mr. Alistair Darling: The Scottish Transport Group has its headquarters in my constituency and at the time of deregulation I was chairman of the Lothian region transport committee, so I think that I know something about the subject—more, I suspect, than the hon. Member for Pembroke (Mr. Bennett), who is no longer in the Chamber, having done his duty to the Conservative Whips and made his contribution. Most of his knowledge seems to be gleaned from reading a magazine. It is difficult to find out what it is like waiting for a bus at 11 o'clock at night in Scotland by reading a magazine that is written several hundred miles away.
Deregulation is where all this nonsense started, for it was the essential prerequisite of privatisation. The Government said that it was not, and the more they said that, the more obvious it became to the rest of us, and to the general public, that that was what deregulation was all about. Deregulation enabled bus companies—I use that term to describe former municipal undertakings, as well as Scottish Transport Group undertakings— to get rid of unprofitable services. There was a mechanism allowing local authorities to subsidise unprofitable routes, and I shall say more about that later.
Under deregulation, the Government deliberately allowed companies to unload unprofitable routes so that on privatisation, they would not be burdened with providing those services. The one ingredient that has been missing at times in the debate, most importantly from Conservative Members, is a definition of what exactly a bus service ought to be. Is it something that provides a social service and transport for people living in the country or is it a business and purely a means of making a profit and looking after shareholders? Therein lies the fundamental difference between the Government and ourselves.
We believe that a bus service should be just that—a service. One of the few points upon which I and the Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), agree—or at least, he agrees about this in private—is that bus services are a service. In my maiden speech, I made the point that, when I was chairman of the transport committee, the hon. Member for Edinburgh, West was a regular caller at my door, asking whether I could do something about this or that bus service, because it had been withdrawn from his constituency. He would say to his constituents, "Isn't this awful? Isn't this terrible?" I believe that he forgot to tell them—I am sure that it was an oversight—that he voted for the very measures that brought about that state of affairs. As the hon. Member knows, deregulation proved a disaster, and had Lothian regional council not been prepared to spend substantial sums keeping unprofitable services on the road, many areas—including several that the hon. Member for Edinburgh, West represents—would have been without bus services.
The Secretary of State said that many local authorities are better off. I can tell him that Lothian regional council was spending about £2 million a year more operating the new deregulated system than it spent when it ran the bus services itself. The reason is obvious. Under the old


system, the surpluses made from the profitable routes were used to keep socially necessary services on the road. Under the new regime, that is not possible and will cause a great deal of difficulty. It is nonsense and hypocritical to say that, just as local authorities are willing to subsidise, and must subsidise, the STG and the former municipal undertakings, they will now be invited to subsidise private operators—who, in some cases, are no better than cowboys—to keep services on the road. The public purse will be raided yet again to keep certain services operating, which is wholly objectionable.
When deregulation was introduced, there was a great deal of talk about competition, just as there has been tonight. There was not really much sign of competition, and I shall give the House an example. In Midlothian on one occasion, Eastern Scottish, a Scottish Transport Group subsidiary company, announced that it proposed withdrawing 12 routes. The local authority was left with no option but to put those routes out to tender, because they were all socially necessary and served villages having no other method of transportation, because car ownership was minimal and train services did not exist in most areas.
What happened when the services were put out to tender? Only one company tendered for the services, and that was Eastern Scottish, which had withdrawn the service only two weeks before. In other words, Eastern Scottish asked to be paid by the local authority to provide services that it had not been willing to provide. It had the local authority over a barrel, because no other company was willing to operate those routes. That is what will happen in the event of privatisation. Private companies because local authorities know that they cannot leave their people isolated and cut off.

Mr. Tam Dalyell: As the Member for the area concerned, may I confirm that everything that my hon. Friend the Member for Edinburgh, Central (Mr. Darling) has said is quite right.

Mr. Darling: I am grateful to my hon. Friend.
Lothian and Strathclyde regional councils have had to pay substantial sums to keep unprofitable services on the road. There is not the slightest doubt that, as local authority expenditure is pressed and as the effect of the poll tax is felt, local authorities will come under substantial pressure to cut expenditure. One item of expenditure that could he cut—although I hope that this will not happen—is the subsidising of unprofitable bus routes.
It will be interesting to see whether the hon. Member for Edinburgh, West goes to Lothian regional council and asks for his bus routes to be kept on the road at night and yet says, at the same time, that he wants the councils to reduce their poll tax. That is the double-talk that we have come to expect. I hope that the Minister will deal with that later and will tell us what he expects local authorities to do to keep services on the road within his constituency.
The bus service is a service, and is valued by the elderly, by people who want to go out at night, by people who need to see relatives in hospital and by people who do not want to drink and drive. One would have thought that the Government would want to encourage that.
Deregulation has not been the success that the Government talked about. The Secretary of State said that it was a success because millions more miles were run. The answer is perfectly obvious. At peak times, on profitable routes, there are more buses chasing each other. I do not

dispute that, if one wants to go on a bus on one of the main routes, there is a greater choice and more buses. However, the evening service in the area that I and the hon. Member for Edinburgh, West represent is far worse than it was before deregulation. If the hon. Member and the Secretary of State ever went on buses, they would know that evening services are poor and not half the services that they were before deregulation.
Ownership is crucial. It is a point on which the Secretary of State has had some difficulty, as he had when we debated the privatisation of electricity yesterday. I want to refer to management buy-outs, because the Secretary of State paid lip service to them and said that he hoped that there would be management buy-outs and, better still, that there would be management and employee buy-outs. However, the history of management buy-outs is not especially successful.
In the English bus companies, managements bought out services and were quick to realise the assets. In one case, the management was quick to sell out to a Gibraltarian company. Once ownership and control pass outside the jurisdiction of Parliament, there is little chance for us to influence the way in which companies operate and conduct business. That is why we object to ownership passing abroad. That was the issue with Scottish and Newcastle Breweries and Scottish electricity.
I do not object to employees having a great say and substantial control of the industry in which they work. That is a thoroughly good thing. However, the Secretary of State did not promise to give employees a major stake or guarantee that they should have, for example, 51 per cent. of the industry in which they work. If he had said that, our attitude might be different. Of course, he will not say that, because he is in the business of looking after people who want to invest in the bus companies to make a return for themselves and other shareholders.
Incidentally, it is no wonder that we hear so much from people who are likely to be in the driving seat—managing directors, and those who represent Scottish Bus Group —and who say that they have no objection to privatisation. Of course they do not; some of them see a good opportunity to make a fast buck. Eastern Scottish, for instance, happens to own a rather large piece of real estate in central Edinburgh, which could easily be sold off and the assets then switched to shareholders in Scotland, England or abroad.
The same thing as happened in England will happen again. Assets were stripped. Many of those who want into the industry will come in not because they want to operate buses but because they want to get their hands on the assets the companies will own. That is the real attraction for many of these investors. They have no interest in whether the No. 23 bus runs after 10 pm, but they have a great interest in what they will own and what they will be able to do with a large site in the centre of Edinburgh. The position is the same in other parts of the country.
Another important point about ownership and the location of offices is their responsiveness. I do not think for a minute that someone in London who had bought Eastern Scottish would care if there was much public outcry about the sale of valuable land, or about services not running. If the Secretary of State is determined to press ahead with privatisation, as I am sure he is, why does he not do something that would be revolutionary and extraordinary, and give the employees at least 51 per cent.


of the company? He will not, because he does not believe in employees' rights, any more than anyone else in the Government.
The Government are opening the nation's tills and allowing their supporters and allies to run away with the nation's assets. It is no coincidence that companies such as Stagecoach are warm backers of the Government and friendly towards the Government's policies. Of course, they want a slice of the action; they are looking after their own pockets, not the bus services. There will be cowboys and people who are unfit to run a bus service. Some will drive their coaches down roads and motorways at 90 mph. There will be companies such as Stagecoach, which has been prosecuted for breaches of the road traffic regulations. That is the story of privatisation, because these companies' greatest priority is to make a return on their capital. The last time I looked at Stagecoach's timetable, I saw that the company runs a bus service from Edinburgh to Perth, calling at Dunfermline, within an hour. How is that possible within the speed limit?
The Secretary of State was also at pains to say that he wanted to return the bus service to the private sector. It is worth looking at why it was taken into the public sector in the first place. If the right hon. and learned Gentleman examines the minutes of the body that was the predecessor of the corporation of his home town of Edinburgh, he will see that, at the beginning of the century, Edinburgh's private bus operators were taken into municipal ownership because they were failing to provide a service. I suspect that that was done by people who were more in turn politically with the Secretary of State than with me.
If privatisation goes ahead, any hope of an integrated public transport policy will go out of the window. One of Edinburgh's difficulties is the city centre congestion caused by the large number of cars seeking to enter the centre. [Interruption.] The Secretary of State and his junior Minister, the hon. Member for Stirling (Mr. Forsyth), shout, "The western relief road." That would have done nothing but add to the congestion. It should be obvious to most people that if we had a public transport system that carried a large number of people quickly and cheaply in and out of the city centre, the problems of car parking and congestion would not exist.
Other European cities recognise that fact. Amsterdam recognises that its centre should be protected and has a cheap and efficient tram and bus service that allows the speedy transit of many people into and out of the city. London is a superb example of public transport breaking down and of people leaving home at 4 am to get to work in their cars. It is happening in Edinburgh, Glasgow and throughout the country—public services are falling apart at the seams because of the lack of public investment and the Government's doctrinaire attitude to public transport. For all those who rely on public bus services, privatisation presents the greatest threat that they have ever known.
The details of the Bill raise issues of principle. Part I deals with the disposal of the Scottish Bus Group. Its five clauses basically come to this: the whole lot is to be transferred to the Secretary of State and he will decide what to do about it. In other words, after the Bill leaves this place, no opportunity will arise for Members of Parliament to discuss on what terms the bus companies are to be sold off, or when. I suspect that—just as in the sale

of MacBrayne Haulage to Kildonan—many of the companies will be sold at knockdown prices because the Government will be anxious to sell them off quickly.
After the Bill becomes law, I am sure that we shall see a procession of people coming down from the golf clubs and Conservative clubs, knocking on the door of St. Andrew's house and saying, "How about a slice of the action? We backed you; now you back us by handing over these bus companies nice and cheap." The Bill gives no protection to the public purse or to the travelling public. Instead, we see the vacuous statement that the Secretary of State must consider "sustained and fair competition."
I will tell the Secretary of State what happens in competition. When deregulation was being discussed, we were told that the Scottish Transport Group would not allow its subsidiaries to act as a monopoly. I know—and everyone who understands what was going on also knows —that that is precisely what happened. Lowland Scottish and Eastern Scottish never competed against each other in the tendering; the whole thing was run centrally. The more I was confronted with denials by individual directors, the more obvious it became what was happening.
When the companies are sold, they will slowly but surely amalgamate. Ultimately we shall have a monopoly —or perhaps, as in the case of the electricity industry, a duopoly—with the Scottish travelling public held to ransom in a stranglehold by the private sector, with any unprofitable but socially necessary routes subsidised from the public purse.
Part II of the Bill deals with Caledonian MacBrayne. Although my constituency cannot exactly be described as maritime, as someone who from the age of nought has been travelling on MacBrayne's boats—especially to the outer Hebrides—I know something about them. It is interesting to note that the reason the Government are not privatising all routes other than the Clyde routes is that no private sector operator would touch them, because a profit cannot be made from them.
The Secretary of State talks about investment in new piers, ferries and roll-on/roll-off facilities. No private sector investor would touch that. In many cases, the number of passengers and vehicles carried in the winter months would not provide a commercial return. It would indeed by monstrous if, after public money had been spent on building new vessels for Caledonian MacBrayne, they were handed over at a knockdown price to some private operator.
Incidentally, as I use the vessel comparatively regularly, let me support my hon. Friend the Member for Western Isles (Mr. Macdonald) in his campaign for a new vessel to cross from Ullapool to Stornoway. The present one is little better than a cattle ship. If we are to build causeways from Vatersay—which I thoroughly support—the replacement of the Suilven must be a priority. I hope that the Secretary of State will deal with that, and not then hand it over to some private operator.
The Clyde crossing is also an important issue. It illustrates exactly where public service and private enterprise mix—or do not mix, as the case may be. Let me take the Secretary of State back to what happened when privatisation of the Gourock-Dunoon route was considered. An inquiry was set up because the then Secretary of State was under considerable pressure to help those who operated Western Ferries. It is nonsense to have made Caledonian MacBrayne cut its crossings from Gourock


and Dunoon from two to one an hour, with the result that one expensive ferry is tied up for substantial parts of the day to make it more profitable for the private operator.
That private operator is operating three or four ancient vessels, purchased from a company that used to cross to the Isle of Wight. Caledonian MacBrayne was made to restrict its services simply to give the private sector operator a chance. That is not fair competition. It was rigged from the start to help the private operator. There was a negative public subsidy to keep a public asset tied up at a pier rather than providing the necessary service. As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) said, it would be nonsense to take away that part of Caledonian MacBrayne because the result would be to

step up subsidies for the outer-isle services. No doubt the Secretary of State would then say that it costs more because it is in the public sector.
The Bill is obnoxious and is flawed simply because it does not recognise the fact that transport is a public service. Many people rely on buses and ferries as part of their way of life and without them they will be marooned and substantially worse off. It is nonsense to suggest that the Bill will improve matters, except for one or two money-grubbing cowboys who will seek to profit out of it. Those are the people the Government seek to protect. The Secretary of State knows that, as does the Under-Secretary. We will oppose the Bill because it undermines a public service which most people in Scotland want to see remain intact. It is one of the reasons why the Conservative party is currently placed so low in the polls.

Mr. David Marshall: The Secretary of State and his fellow Tories have made much of employee-management buy-outs in the Scottish Bus Group and in the public transport sector in our cities. The Secretary of State also referred to the Transport and General Workers Union's support for such buy-outs. I declare an interest as a TGWU-sponsored Member of Parliament and I can tell the Secretary of State that the union and its members—the bus workers in the Scottish bus industry—did not decide to opt for such a buy-out by choice. Given freedom of choice, their decision would have been to remain as they are now. However, the Government do not believe in freedom of choice, except for the rich. Therefore, the bus workers have opted for what they see as the next best option. They have opted that way largely out of fear for what will happen to them as a result of the Bill. They are afraid of what will happen to their wages and conditions of work and to their jobs. If they fall into the hands of some of the asset-stripping predators waiting in the wings, who knows what will happen to them? They have every right to be afraid.
I shall look at the much-mentioned and much-maligned Stagecoach company. In Scotland, Stagecoach is a non-union company—if I am wrong I am happy to be corrected and I will apologise—but in England it allows trade union membership. However, it pays lower wages and offers poorer conditions than those in the Scottish Bus Group, but the fares are basically the same. Therefore, Stagecoach is not passing on the benefit of its saving in operational costs to the fare-paying passenger by offering lower fares and better services. It is more concerned with making higher profits and exploiting its employees.
I seek positive clarification from the Minister on several issues which are important to employees in the industry. Is the Minister prepared to include within the articles of sale of the companies the proviso that the successful purchaser must continue with membership of the present pension scheme, which is known as TOPS—the transport operators pension scheme? Will there be any difference in the treatment of pension rights for existing and new employees, or will there simply be no legal requirement to provide a pension scheme? Will workers who have left the industry after years of loyal service—many of them on health grounds—and who have earned entitlement to a pension, have that pension safeguarded? Those are important points. I am sure that the Minister will deal with that when he replies to the debate.
On the question of financial assistance to employee-management buy-outs, the Secretary of State boasts that up to 75 per cent. of professional fees, subject to a maximum payment of £48,750, can be provided. If, however, the bid is successful, that assistance has to be repaid. The Secretary of State gives it with one hand and claws it back with the other. The only beneficiary of that type of assistance will be the ever-increasing number of consultancies that are springing up all over the place. In the main, consultants are the friends of this Government.
My hon. Friend the Member for Cunninghame, North (Mr. Wilson) referred to the 5 per cent. discount on the highest bid that was made available for employee-management buy-outs when the National Bus Company was sold. The Secretary of State has not said whether that

discount will apply to Scotland. Even if it will, it is totally insufficient to deter a determined asset stripper who is willing to bid over the odds and more than recoup the extra cost by selling off the assets, which are often on prime sites in our towns and cities.
Bearing in mind the fact that, of the 72 national bus companies, only two were the subject of successful management-employee buy-outs at the time of the original sale, if the Secretary of State will not agree to the suggestion of my hon. Friend the Member for Edinburgh, Central (Mr. Darling) to give 51 per cent. of the shares to the employees of the Scottish Bus Group, I appeal to him —if he genuinely supports employee-management buy-outs—to consider that one of the best ways to achieve it is to offer to them at least a 10 per cent. discount on the highest bid.
Furthermore, how many companies will any bidder be allowed to buy? When the 72 NBC companies were sold, no bidder was allowed to buy more than a maximum of three companies. Only 11 companies are to be sold in Scotland; only one company should therefore be sold to any one bidder. What safeguards does the Secretary of State intend to provide to prevent the regrouping of the Scottish Bus Group under single ownership after privatisation? What will happen if some of the companies fail to find a bidder, especially those companies that operate in rural, remotely populated areas? Will they be kept in public ownership, or will they be given away—perhaps by means of a "buy one, or buy two, and get one free" offer?
Another aspect of the Bill that concerns me greatly is its effect on the bus and coach building industry in Scotland. Traditionally, Walter Alexander and Company of Falkirk has been the main supplier to the Scottish Bus Group and other Scottish bus companies, but already, as a result of deregulation, it is suffering declining orders. Imported buses and minibuses are coming on to the streets in even greater numbers. A privatised Scottish Bus Group will no doubt go down the same road. It will buy even more foreign vehicles. No longer will there be the traditional loyalty and connection between the Scottish Bus Group and Walter Alexander. The Bill will result in the loss of many jobs in the industry.
The Scottish Bus Group was not privatised at the same time as the National Bus Company, because the Government thought then that the result of deregulation would be that the Scottish Bus Group would swallow up most of the other independent and public operators in Scotland and thereby become a much more attractive and saleable commodity at a substantially increased price. However, that did not happen. The Scottish Bus Group lost several million pounds in the Greater Glasgow area as a result of getting it wrong, following deregulation.
The hon. Member for Pembroke (Mr. Bennett) referred to Glasgow. I am glad that he has returned to the Chamber after a considerable absence. We know what happened in Glasgow after deregulation. Hundreds of buses crowded into the city centre, chasing even fewer passengers. They brought the city centre to a standstill. The newspapers were full of pictures. National television showed what was happening. The only person who was unaware of it was the hon. Member for Pembroke.

Mr. Nicholas Bennett: The hon. Gentleman says that I was the only person who was unaware of it, but when he intervened during my speech I told him that the traffic commissioner turned down that complaint.

Mr. Marshall: Yes. When I intervened I also put the record straight as to why Strathclyde regional council felt that it was necessary to approach the traffic commissioner. I think that he made the wrong decision, but that is a matter of opinion.
My hon. Friend the Member for Clydesdale (Mr. Hood) is correct. His constituents, together with those of many other hon. Members, lost out. Buses were withdrawn from rural areas so that they could be used on what were believed to be the most lucrative routes in the Glasgow area. It was the economics of the madhouse, and they ended the problem. I am sorry to say that the fact that such behaviour was not profitable, rather than the actions of the traffic commissioners, ended it all. Indeed, the Scottish Bus Group lost millions of pounds.
The hon. Member for Pembroke seemed to welcome the purchase of London buses and the reappearance of conductresses, or clippies. The purchase of 30-year-old, and even older, open-ended ex-London Routemasters was not welcomed in Scotland by those of us who are anxious about safety and reliability in public transport. Glasgow got rid of such buses in the 1960s, largely because too many passengers got injured boarding and alighting at stops and elsewhere, causing a hazard to traffic.
The clapped-out ex-London buses kept breaking down in many parts of Glasgow. That was another problem which the traffic commissioners examined. The buses should have been in a scrapyard, not on the streets of a major city. I agree with the hon. Member for Pembroke that the conductresses were popular, but competition has meant that they have almost disappeared. As many of us thought at the time, the move was simply a temporary publicity gimmick.
The main emphasis of the Bill is on profitability, not the provision of services. At the moment, local authorities can and do subsidise unprofitable but socially desirable routes. As there is a widespread population outwith the heavily populated central belt of Scotland, it is not unreasonable to forecast that the majority of rural routes will be deemed unprofitable by private operators or left to depend on the mercy of local authorities which the Government continually deprive of the resources necessary to provide proper services for their electors.
The Bill has little to do with transport or providing services —it is all to do with selling off publicly owned assets at knockdown prices and transferring 10,000 workers from the public to the private sector, and it is yet another attack on trade union organisation and the wages and conditions of workers.
From 1960 to 1969, I was a transport worker. I spent two years as a tramcar conductor—I think that I am the only ex-"cour" conductor in the House—and seven years as a bus conductor, all with Glasgow corporation transport. Bus workers everywhere do an excellent job on behalf of the nation. They work all manner of shifts, every day of the week and every week of the year, sometimes in the most atrocious weather conditions and in the most difficult social conditions. What is their reward for all this loyal service? A kick in the teeth by the Bill. They deserve much better.
The Bill will do nothing to benefit the economy of Scotland or to create jobs there. Indeed, it will cause jobs to be lost. For all those reasons, the Bill is bad and deserves our opposition.

Mr. Thomas McAvoy: I am quite convinced that what we heard from the hon Member for Pembroke (Mr. Bennett) was nothing less than a grovelling performance in an attempt to get some sort of job in the Government. I wish him every failure in that.
The performance of the hon. Member for Argyll and Bute (Mrs. Michie) at the prospect of jobs being gained in her constituency at the expense of another was quite disgraceful.
Many people will recall the moment of truth for the right hon. Member for Old Bexley and Sidcup (Mr. Heath) when, as Prime Minister, he faced the reality of privatising Rolls-Royce. If he had not nationalised it, the company would have been finished or, more likely, snapped up by foreign buyers. The Government that the right hon. Gentleman formed started off on similar lines to the present one. Public ownership was considered a bad thing but, to his credit, the right hon. Gentleman did what he had to do for the sake of the country when he was confronted by the Rolls-Royce crisis. The right hon. Gentleman recognised that the country could not be run with a dogmatic approach to managing the economy and providing public services.
The Secretary of State for Scotland is now facing the reality that the dogma of privatisation is not a talisman for economic prosperity. No doubt his continued advocacy of it has more to do with personal ambition. He knows that the Tory Back Benches are full of people with arrested mental development who jump up and get excited at the mention of privatisation.
The Secretary of State for Scotland is beginning to recognise reality. That is demonstrated by his comments on 30 November when he said:
I made it clear that the Government had no preconception as to whether the privatisation of Caledonian MacBrayne would be a realistic option.
We are told continually that privatisaton is the answer to everything, and that there is no alternative, yet the right hon. and learned Gentleman is on record as questioning whether privatisation would be a realistic option. Let us not hear any more of the Tory claim that they have a superior method of running the modern economy. His attitude to CalMac demonstrates that the Secretary of State for Scotland has taken a small but significant step on the road to Damascus. Let us have no more hypocrisy.
The Scottish Transport Group, which employs 10,000 people and has a turnover of £180 million, is obviously an important factor in the Scottish economy in addition to its crucial social role in Scottish life. The objectives of the Bill have been well summed up by the Secretary of State, as follows:
To manage its bus operations as it would do in the interests of private shareholders seeking in particular to retain customer goodwill".
That demonstrates the Government's priorities, not only in the Bill but in their general approach to the economy. The second objective is to provide services "subject to Objective I." It is quite clear that the provision of services is subject to the interests of private shareholders.
The Secretary of State for Scotland takes the view that the travelling public will benefit from the greater sensitivity


to the market that a private company necessarily has. The intellectual poverty of such a banal statement does not square with the intellect of the Secretary of State. It seems that, in spite of his intellect, he is grovelling to the extremists on his own Back Benches. He is just another Tory politician on the make, prepared to sacrifice his credibility for his career.
Let us consider the service provided since deregulation. The Secretary of State for Scotland said:
As he knows, Strathclyde regional council is perfectly able to provide public funds to support the continuation of routes that individual companies do not want to provide. The regional council is the appropriate authority to decide whether there is a social need for a bus service on a particular route."—[Official Report, 30 November 1988, Vol. 142, c. 709-21.]
If ever I was tempted to judge the Secretary of State as a politician who was fair and above board, that temptation left me when I heard that statement.
As a former Strathclyde councillor, I remember the agonies that I suffered in the preparation of the council's budget. Against the background of successive cuts in rate support grant, we had to rob Peter to pay Paul in trying to maintain Strathclyde's public services.
Strathclyde regional council is one of the best run councils in Scotland. Even the Secretary of State has paid tribute to its record. To claim that Strathclyde is perfectly able to provide public funds for the continuation of routes does not stand up to scrutiny, and the Secretary of State knows it.
I disagree with the comments of my hon. Friend the Member for Cunninghame, South (Mr. Lambie) about Strathclyde region. Strathclyde's Labour administration is doing a first-class job, in spite of the Government, and all Opposition Members should be giving it our support.
Deregulation is not working. The Scottish Consumer Council says:
It is still too early to give a final verdict on the effects of deregulation. The situation is unstable and the forthcoming privatisation of the Scottish Bus Group throws everything in the air.
The Secretary of State has made great play of his enthusiasm for employee-management buy-outs. As has been said before, buy-outs have been preferred to control of the workers' future going to people who do not care. There is nothing wrong with employees buying out these companies—this is a means of common ownership which the Opposition welcome—but the motivation for employee buy-outs should not be employees' desperation to retain control over their future. They should be motivated by a thought-out, principled approach, encompassing economic and social factors.
The Secretary of State said that the Unity Trust bank was supported by the trade union movement. He should note the role of the Co-operative bank in this venture. The background to Unity Trust shows the support that came from the trade union and co-operative movements. It is a bit late for the Tories to claim the credit for that development. The Secretary of State should take steps to ensure that the pattern of employee buy-outs in Scotland differs from that in England. These buy-outs, if motivated by a commitment to the community of which they are part, would be crucial in maintaining jobs, standards and services.
The Bill will do nothing for the travelling public and employees unless control is gained by employee buy-outs. The Secretary of State has done little to encourage them. Many of us remain suspicious that he will be content to allow the Tories' friends in commerce and industry to acquire these companies, with all the dangers for employees and the public associated with the Tory dogma of privatisation. For all those reasons, we shall oppose the Bill.

Mr. John McFall: It is getting late, but my constituents would not forgive me if I did not raise the points which they have made to me in the past few months about the Bill. They will be affected by the geographical subsidiaries, Central and Kelvin, which will be amalgamated and privatised. The service will become even worse in my constituency.
When I go around my constituency, I am asked, "Are the Government interested in public transport, or is it a thing of the past?" Sadly, it appears from some comments that it is a thing of the past. We have had two doses of the Government's attempts at transport in Scotland. We had deregulation. My experience, and that of my constituents, was dismal. As one elderly constituent said to me, "Since 1979, the Prime Minister has wanted to put us back on our feet. She has—because there are no buses left in the area." That was the result of deregulation in my area. Because of their stoicism, my constituents have told me that they have more chance of catching the flu than of catching a bus.
What do we have to add to deregulation? Bearing in mind that deregulation involved bidding for contracts, we now have privatisation as well. That is not deregulation which just invites tenders for routes; it involves opening up to the market everything to do with buses, with the attendant issues of bus networks, costs, frequency of service and safety. Where is the social dimension?
On 30 November, the Secretary of State talked about the social dimensions:
Strathclyde regional council is perfectly able to provide public funds to support the continuation of routes that individual companies do not want to provide. The regional council is the appropriate authority to decide whether there is a social need for a bus service on a particular route."— [Official Report, 30 November 1988; Vol. 142, c. 721.]
The right hon. and learned Gentleman was telling us that social need was not met through privatisation. To meet it, we have to go to the local authority, which has been deprived of money year after year. Where is the social concern in the Bill? There are implications for local authorities in respect of assistance for the elderly, the handicapped and school transport and integration with fare-paying passengers.
What chance is there of a social dimension with the Scottish Bus Group working to a profit target? What faith should be put in the Secretary of State's statement about employee participation? Despite several opportunities, the Secretary of State has still given no commitment about employee participation. He said:
It will be encouraged by the provision of financial assistance to management-employee teams wanting to bid for their companies and offering the prospect of locally based management with real employee participation.
As my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) said, the Secretary of State gave no figures to support that. The Secretary of State's statement contains no commitment.


The Secretary of State went on to say that the Government cannot guarantee that employee management
will be the end result, because that will depend on the proposals eventually put before us."—[Official Report, 30 November 1988; Vol. 142, c. 708-21.]
There is no commitment in that respect, just as there is no commitment to the social dimension.
We should remember that when we consider what happened to the 72 component companies of the National Bus Group in England when only two went to employee participation buy-out. That again shows why we do not have any faith in the Secretary of State's statement.
Safety is an important aspect, but it has not been mentioned tonight. We should remember the Clapham Junction rail accident this week and the King's Cross and Herald of Free Enterprise accidents. Surely safety should have been an issue to be considered in Scotland's transport policy.
The environmental aspect has not been mentioned either in this debate. We have been told that the Prime Minister is interested in the green vote, but what about the greenhouse effect, lead-free petrol, overcrowded roads and an integrated transport policy? No reference has been made to that because the Government have a quick-buck mentality. This is a quick sell-off and the Government have no concern for anything that is left behind.
Finally, I shall deal with the rural dimension of the Bill and its effects on my constituency. I visited ScotRail last week and it informed me that tourism is the mainstay of Scottish rural routes. However, according to The Guardian last week, British Rail is now considering whether a bus service would be a better use of Government subsidy. Two routes in my constituency—the Helensburgh to Fort William route and the Helensburgh to Oban route—could disappear as a result of that. If that happens, those areas and communities dependent on tourism will decline. The life of the community is therefore in peril.
There are no Labour district councillors in Helensburgh; they are all Conservative district councillors and there is an independent regional councillor. If I stand in Helensburgh town centre with a petition, I shall find 100 per cent. support because the Helensburgh public want to retain their communities, as they have repeatedly told me. They know that the bus service would not work. They need a rail service to retain the rural dimension. In effect, they are saying that they need an integrated transport policy.
What attention have the Government paid to such a policy? When was the last time that the Secretary of State met the chairman of ScotRail or the chairmen of the bus companies to discuss an integrated transport policy? The Bill makes no mention of an integrated transport policy. There is no commitment to such a policy, to communities or ordinary people. People's interests have been set aside in this sale in the pursuit of ideological goals and cuts in public expenditure. The Government are saying that they do not want to spend any more or to give any commitment to a public sector service in Scotland, whether rural or urban. In other words, they are casting aside people's social concerns.
The Bill shows a total lack of concern for social, environmental and transport issues. It will do nothing for the ordinary person, the community or the country, and that is why it deserves to be rejected tonight.

Mrs. Maria Fyfe: Like my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall), I have an interest to declare. I, too, am a Member sponsored by the Transport and General Workers Union.
I have another interest to declare, which is shared by only one other person in the Chamber at this moment, and that is you, Madam Deputy Speaker. My second interest is that I am a female. That being so, I want to talk about safety, a topic which has not yet been mentioned. The male Conservative Members present do not have sufficient imagination to understand what it is like to travel alone, late at night, in a lonely area. They do not know what it is like to sit alone in a bus station late at night. They do not know what it is like to be afraid and to be wondering constantly how long it will be before the bus arrives. A woman on her own may be confronted by drunks fighting or by one man making a pest of himself. It is sad that women live with these fears daily. They often do not have cars of their own, so they must rely on public transport.
Some hon. Members might wonder what my remarks have to do with privatisation. The answer is simple. In the drive for profits, services are cut and the staffing of stations is reduced. Travellers are less safe when there are fewer staff at stations, and that will be the result of the quest for profits. Everyone in Scotland knows that. The Conservative parliamentary women's committee has been formed presumably so that it can deal with issues that concern women, and it is sad that no Conservative Member on the committee is present to protect the interests of women travellers.

Mr. Ian Bruce: Will the hon. Lady accept my assurance that in my constituency, where there has been deregulation, we have seen many new operators with minibuses? Women say how safe they feel when they are close to the drivers, who have a supervisory role. The instances of attacks on women and muggings of young men have decreased greatly since deregulation.

Mrs. Fyfe: I do not think that that intervention answers the problem.

Mr. Hood: Does my hon. Friend agree that the Yorkshire Ripper was a driver?

Mrs. Fyfe: I shall not give way again because time is short.
The fact is that women feel a lack of security and are afraid to travel alone at night in lonely areas. Only a few months ago a woman was murdered on a train—[Interruption.] I do not know why Conservative Members find that funny. It is not funny to travel alone and to be frightened. The response of Conservative Members shows their insensitivity.
The hon. Member for Pembroke (Mr. Bennett) talked about the Bill and linked it with popular capitalism. He has failed to notice that privatisation is not the least bit popular in Scotland, especially in the form contained in the Bill. The great majority of the Scottish population do not want it.
When a family is able to run a private car, it is usually used by the husband for his journeys to and from work. His wife will get around by using public transport, along with her children, whatever the inconvenience may be. In the search for profits, companies will cut services, alter


routes and remove buses from routes. Women with children to look after, or elderly parents, will suffer all the inconvenience, while others seek to make a fast buck.
When the public are dissatisfied because of a lack of service, who will be accountable? Conservative Members have failed to answer that question. The type of complaints about private sector bus services in my constituency is almost unbelievable. A bus was removed from service on a route that served a hospital. Passengers have had to wait three hours in some instances when travelling from one place to another. It is impossible to travel by bus to some local hospitals.
In my constituency a young boy travels from his home to his secondary school and he has been refused access to a particular company's buses because one driver claimed that his behaviour was unacceptable. Oddly enough, the boy's behaviour is acceptable on every other bus he travels on. When his father protested, the bus company did not have the courtesy to answer—[Interruption.]

Madam Deputy Speaker: Order. I would appreciate it if those hon. Members who wish to carry on conversations would do so on the other side of the swing doors.

Mrs. Fyfe: Thank you, Madam Deputy Speaker. Your having to intervene demonstrates the incredible lack of interest on the Conservative Benches. [Interruption.]
To finish my point, that boy's father has written to the bus company three times, but it did not have the courtesy to answer. He came to me and asked me to take up his case. All I could do was write to the company and hope that it would respond to me.

Mr. David Tredinnick: Will the hon. Lady give way?

Mrs. Fyfe: The hon. Gentleman has just come into the Chamber, so I will not give way.
When the Secretary of State for Scotland announced the privatisation, he referred to the consultation with Quayle Munro, the accountants. I asked him whether he had ever discussed safety and convenience for women and children passengers. He said that he had not done so, because he did not believe that that had any relevance. He had better wait and see, because the complaints will be legion and I will deliver to him every complaint from the women of Scotland as I receive them.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I congratulate the hon. Member for Cunninghame, North (Mr. Wilson) on his strong support for our decision on Vatersay, which will be very important for the Western Isles. However, I take issue with him on one of his earlier points. He said that safety had suffered as a result of deregulation. The evidence does not bear that out and, despite the increase in vehicle miles run by buses since deregulation, there has been a fall in the number of casualties in accidents involving public service vehicles between 1985–86 and 1986–87. Nor is there any evidence to suggest that vehicle quality has deteriorated.
The hon. Member for Cunninghame, North said that bus services should be provided in the social interest. Of course the subsidy arrangements provided in the

Transport Act 1985, following deregulation, allow regional and islands councils, quite rightly, to subsidise any bus services that they consider to be socially necessary. Councillors have the necessary powers to maintain the rural bus network and fill the gaps in the commercial network where they consider that there is a social need.
The hon. Member for Edinburgh, Central (Mr. Darling) also raised the question of socially necessary services. I assure him that the need for regional councils to subsidise bus services is taken into account in the rate support grant calculation, both in reaching decisions on expenditure provision and in grant distribution. That will certainly continue in future. He omitted to say that, when I made representations to him after the withdrawal of bus services from my constituency, he acceded to a large part of my representations.

Mr. Darling: Of course I did, because I believe in providing a public bus service as a service. I was happy to accede to the hon. Gentleman. I was also happy to tell his constituents why it had all come about. Will the Under-Secretary of State tell me why the leader of the Conservative group on the Lothian regional council, Mr. Brian Meek, believes that one of the elements of high spending in Lothian regional council is the amount of money it spends subsidising the bus service? Is he saying that Brian Meek is wrong?

Lord James Douglas-Hamilton: The hon. Gentleman should be clear about the fact that there are socially necessary services. He and I both recognise that, and I have no regret about approaching him.
The hon. Member for Moray (Mrs. Ewing) raised the question of rural bus services. Research on the effects of bus deregulation shows that rural bus networks have been largely maintained both in extent and in frequency.
I wish to answer many of the points raised, but first I shall briefly explain the Government's objectives. First, we want to complete the dismantling of control over the Scottish bus industry so that it is free to respond to the needs and demands of consumers. Deregulation was the first step in that process and, two years on, the bus network remains and the number of vehicle miles provided has increased. Where bus operators have seen opportunities to provide more services, they have been free to do so and there has been a net increase in the number of vehicle miles. Where services have been lost, it is because local authorities felt that it would not be justifiable to provide, at public expense, the continuation of such services. Where services were considered to be socially necessary, they have been retained at a reduced cost overall. New services have been provided.
In a freer bus market it is anomalous for the dominant position to be held by a publicly owned bus company with more than half the total market. It is also anomalous for such a company to be centrally controlled in a market designed to encourage local responsiveness, because the whole purpose of our policy is to do just that. The Bill provides powers for a freer amd more responsive market. The Scottish Bus Group will be divided into 11 units, with nine local operating units. Our aim is to create new, locally based companies that will not only be for the benefit of the bus traveller, but will boost enterprise in Scotland. The enthusiasm of management and workers to take part in that process shows that there is a spirit of enterprise.


Our second objective is to make suitable arrangements for the continuation of the important lifeline ferry services on the west coast of Scotland provided by Caledonian MacBrayne. Every Scottish Member will be aware of the verse:
The earth is the Lord's and all it contains
Except for the Islands, and they are MacBrayne's.
It is unthinkable that we should be other than totally committed to the continuation of at least the present quality of service. Our careful examination of CalMac's operations show that, for the most part, its routes are and will continue to be loss-making. For that reason, it is not a straightforward case for privatisation and it will be transferred to my right hon. Friend the Secretary of State.

Mr. Wilson: While the Minister is in the mood to quote Hebridean folklore, perhaps he would say whether he is aware that the word "Tory" in Gaelic means "thief".

Lord James Douglas-Hamilton: I am not sure that the hon. Gentleman has his facts right—it certainly does not spring from what I am saying. CalMac is providing a lifeline service to the islands, which will most certainly continue.
My right hon. Friend the Secretary of State will set up a new board for CalMac and give it a clear directive to examine how its operations can be provided in a more cost-effective way while maintaining at least the present standard of service. During recent years there has been substantial investment in CalMac and future arrangements will ensure that our commitment to improve support for ferry services will continue to be honoured.
The hon. Member for Glasgow, Shettleston (Mr. Marshall) raised the question of pensions, about which there has been some concern. It is a complex issue and discussions have already started. I am glad to tell the hon. Gentleman that the Scottish Transport Group has appointed an expert pensions adviser who is already holding discussions with the unions. Suitable arrangements will be made to safeguard pension rights and to provide for their continuation. It will be for the privatised companies to establish new pension arrangements for their employees.
When making bids, prospective purchasers will be asked to state their proposals for pensions. The terms of new pension arrangements may be different from those of the Scottish Transport Group. The group will provide transitional arrangements to ensure continuity of pension provision until new schemes are provided in the privatised companies. Arrangements will be made to secure in full the rights of existing pensioners and accrued rights under deferred pensions. That means that all existing pensioners will continue to receive the same pension as they would have had if the Scottish Transport Group had continued.
For existing employees all accrued entitlements up to an employee's date of leaving the STG pension scheme will be fully protected in accordance with existing provisions with regard to future pensions increases. Employees will have a choice either to opt for a transfer value to be paid into their new scheme or to have deferred pension rights under their existing accrued entitlements.
New pension arrangements will require to be established also for those employees of Caledonian MacBrayne who are currently within STG pension arrangements.

Mr. David Marshall: I am grateful to the Minister for his answer on employees who have already earned a pension entitlement and left the industry. Is he saying that existing employees, after their transfer to a new company and after a transitional period, could well have their pension scheme changed to a scheme inferior to the one they enjoy or to no scheme?

Lord James Douglas-Hamilton: I said that employees will have a choice between opting for a transfer value to be paid into the new scheme or to have deferred pension rights under existing accrued entitlements, depending on which is more favourable to the employee concerned. It is important that an expert pensions adviser is now in touch with the trade unions on that point and is following it up.
A further important issue which has been raised is management-employee buy-outs. My hon. Friends the Members for Dumfries (Sir H. Monro) and for Tayside, North (Mr. Walker) provided strong support for that, as there has been throughout Scotland. We wish to encourage such buy-outs and preference will be given to bids incorporating a real degree of employee participation. The Secretary of State has already announced the financial assistance that will be available. That is a maximum assistance of £48,750. Seminars will be held with managers on the general principles of these buy-outs as well as video presentations—

Mr. McKelvey: It disturbs me that the Minister says that consultations will be held with managers on manager-employee buy-outs. I should have thought that, in a democracy, we should talk to the workers.

Lord James Douglas-Hamilton: The hon. Gentleman is right. Seminars will be held with managers on the general principles and a video presentation will be given to the work force at all depots.
I shall show the House how strong is the feeling in favour of management-worker buy-outs. The general manager of Strathtay is reported in The Scotsman as saying:
We consulted with the staff throughout the company, held meetings at all the garages and the view came back loud and clear that they wanted to attempt to mount a bid.
Lowland's general manager said:
We are absolutely delighted that Mr. Rifkind has accepted our strong argument that Lowland Scottish should be allowed to stand alone. Now we must convince him that a management-employee buy-out would work.
The general manager of Northern Scottish Omnibuses said that the intended to lead a management-employee buy-out. Mr. James Moffat, general manager of Highland Scottish Omnibuses, said that staff had started a savings scheme with a view to taking part in a buy-out. For Eastern, Mr. Gall said that the company was encouraging its people to support a buy-out bid because it is the best deal for everybody and a sound proposition. The Scotsmanreported:
Mr. Shoat, the Scottish TGWU secretary, said that he hoped that Unity Trust, the trade union bank, might provide help for employees trying to put together buyout packages.

Mr. Wilson: The Minister is quoting from The Scotsman, and I am sure that he will not wish to be selective. He will also wish to quote from Mr. Hamish Morrison, the chief executive of the Scottish Council (Development and Industry), who said:
Simply to offer assistance with drawing up a bid, with no guarantee that management and employees will not be outbid by competitors with deeper pockets, is wishful thinking.


Would the Minister care to address that concern?

Lord James Douglas-Hamilton: The hon. Gentleman leads me directly to the question of preference. My right hon. and learned Friend the Secretary of State said today that the price would not be the only factor in deciding what bids to accept. He would have to take into account as the main test the promotion of sustained and fair competition, the extent of employee participation and price. Management-employee buy-outs, by their nature, create a large number of companies, which add to competition, and that will be borne in mind.
My right hon. and learned Friend made it clear that Scottish-based companies with a significant measure of employee participation will satisfy some of the competition and participation objectives, but it is essential that the price is relevant to the value of the assets. The House will be aware of the strong interest that we have in seeing the spread of employee ownership and participation in management-employee buy-outs, but not regardless of cost.

Mr. Robert Hughes: Will the Minister give an undertaking that the bids for each and every one of the 11 companies will be made public so that we can judge the effectiveness of the Minister's decision making?

Lord James Douglas-Hamilton: I shall look at that point.
Many hon. Members have expressed concern about ownership safeguards. One of the main objectives of privatisation is to boost enterprise in Scotland through the creation of locally based companies. One of the best ways to do this is through management-employee buy-outs, which we are keen to encourage. However, no guarantees can be given about the eventual outcome of the bidding process, nor about what happens to companies after privatisation. One Scottish company bought four English companies at the NBC privatisation, and we cannot deny English companies the same right to bid in Scotland.
The best defence against takeover is for a company to be well run and successful, and we had this very much in mind in deciding on the units for sale and their size. Legislation already exists to control anti-competition practices. Therefore, any proposed mergers of companies after privatisation will be subject to competition legislation.
The hon. Member for Cunninghame, North asked about asset stripping, and other hon. Members expressed concern about this. Specialist advice on property matters will be sought. Arrangements will be made in each case to ensure that either the future development value of bus companies is reflected in sales proceeds or that the conditions of sale ensure that an appropriate share of future development value is recouped if a property is sold within a specified time. We shall be careful to ensure that there is no scope for asset stripping.
This is an obvious point, but we are committed to an upgrading of the ferry services. Expenditure has been more than £22 million on capital works, including pier works and ships, and since 1979 we have spent some £78·7 million in direct support of ferry travel, which is a substantial amount.
The hon. Member for Glasgow, Maryhill (Mrs. Fyfe) asked about consumers making their views known. They

can do so through the Shipping Services Advisory Committee, and the Scottish Transport Users Consultative Committee. My hon. Friend the Member for Dumfries raised this point as well. From recent discussions with the islands' community representatives, I am aware of how strongly they feel about the value of these bodies in making representations, and I see no reason to change the consultation arrangements when CalMac is taken into the ownership of my right hon. and learned Friend the Secretary of State. It is vital that the views of consumers are taken into account. It is our intention to appoint members of the new CalMac board with first-hand knowledge of the islands and their needs. I emphasise the importance that the Government place on the responsiveness of the company to the community that it serves.
The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) made a sincere and passionate speech on behalf of his constituents at Gourock. The points that he mentioned will be looked at, but there are sound reasons for moving the headquarters to Oban.

Mr. Graham: Why?

Lord James Douglas-Hamilton: They will be nearer the centre of operations, and many people recognise that advantage. Nevertheless, that decision will require careful consideration, and the Government will look to the new board to deal positively with that issue, taking into account all relevant considerations in relation to the Clyde.
The privatisation of the upper Clyde will inevitably lead to a shift in the company's sphere of influence. I appreciate the hon. Member's fears that there will be a reduction in the number of jobs in his constituency, but two important factors must be taken into account. First, there are the commercial aspects of CalMac's operations to be considered and the greater emphasis on Western Isles services in the future. Secondly, the jobs in question will not be lost to Scotland. The leader in the Glasgow Herald commented:
The proposal to shift the centre of administrative operations to Oban makes sense. In a unitary state, the furthest flung areas have as strong a claim to efficient public services as anywhere else.

Mr. Graham: rose—

Lord James Douglas-Hamilton: I have given way frequently, and I shall make this the last occasion.

Mr. Graham: I feel sure that I am not hearing the Minister right. I believe he said that a board will be established having decision-making powers. But now he is saying that the board must move from Gourock to Oban —so there will be nothing but hard-line guidance.

Lord James Douglas-Hamilton: When the hon. Gentleman reads Hansard tomorrow, he will see what I said. His points will be carefully considered, but it is very much our hope that the headquarters will move closer to the centre of operations.
As to the Gourock-Dunoon and Weymss bay-Rothesay services, there is no doubt that the situation in respect of the Gourock-Dunoon crossing is anomalous. It is an unsubsidised private sector crossing competing with a subsidised public sector crossing on a similar route. The vessels Jupiter, Juno and Saturn making that crossing are shared with the Weymss bay-Rothesay crossing and are interchangeable. There seems a good case for the private


sector to take on those crossings, and we shall ask the board to investigate with the private sector the possibility of transferring those routes.
The hon. Member for Argyll and Bute (Mrs. Michie) asked about RET. It has been thoroughly considered in the past, and the Secretary of State announced the reasons for his position on 21 February 1984. A flexible RET system is something of a contradiction in terms, as fares are meant to reflect the cost of travelling the same distance by road, and remove charges from controversy.
The hon. Member for Argyll and Bute asked also about rural railway lines. The Bill's scope does not include them. The hon. Lady said that rural lines are under threat, but I reassure her that British Rail has no plans to close railway lines in Scotland. She was referring to something that was purely press speculation.
The Bill is important for Scotland's public transport. We believe that it will make Scottish bus services more competitive and responsive to their customers. We believe that it will provide a boost to enterprise in Scotland, giving working men and women the opportunity to have a stake in their industry.

Mr. McKelvey: On a point of order, Madam Deputy Speaker. I notice that the Strangers' Gallery has been cleared. Is there a reason for that?

Madam Deputy Speaker: There is, to my knowledge, no reason for it. I can still see people in the Strangers' Gallery, but if right hon. and hon. Members are concerned, I shall call for a report immediately.

Later—

Madam Deputy Speaker: I understand that members of the public were being moved to another gallery to give them a better view.

Lord James Douglas-Hamilton: Hon. Members can be reassured that nothing they said caused them to be moved.
Caledonian MacBrayne, with a new independent board, will continue to provide the important lifeline services to the islands to which we are committed, but it will do so with ever-increasing responsiveness.
This Bill is yet another example of the Government's determination to give the Scottish people control of their destiny.

Mr. Dennis Canavan: On a point of order, Madam Deputy Speaker. Will you confirm that this debate can continue indefinitely, despite the fact that the Minister has sat down?

Madam Deputy Speaker: That is quite correct. I was under the impression that all hon. Members knew the Standing Orders of the House.

Mr. Canavan: I had no intention of participating in the debate until I heard the ludicrous and unsatisfactory speech made by the Minister. In previous encounters with him I have described him as the most incompetent Minister in the Scottish Office, which is saying something.
I shall encourage many of my hon. Friends to speak in this debate, which can go on indefinitely. At Scottish Question Time, English infiltrators come in to disrupt our proceedings, but at least tonight we can inconvenience them by keeping them out of their beds.

I must declare a constituency interest. I travel on buses occasionally: I take the bus from my house in Bannockburn to the station, to get to London. I know that, once upon a time, the Minister's ancestors came to Bannockburn for adventurist militaristic purposes, and that he has benefited greatly from that. His ancestors came on horses; after this Bill, even he might have to do so—[Interuption.] —or, as some of my hon. Friends have suggested, he might come by stagecoach.
The Scottish Midland bus group and Scottish Bus Group are in my constituency. The latter until recently serviced buses throughout Scotland—

Mr. Alex Salmond: I know that the hon. Gentleman will want to reinforce that point before the English Members who have crowded into the Chamber to hear his speech leave again because they think he will go on for some time. I know, too, that the hon. Gentleman will want to make a point about the mental health of the Minister responsible for health in Scotland, who claims massive minorities for legislation like this.
Is the degree of public support for this Bill equivalent to the 19 per cent. who support the poll tax, the 23 per cent. who support student loans and the 33 per cent. who support opting out? Or is it more equivalent to the 61 per cent. who are dissatisfied with the Secretary of State for Scotland, the 71 per cent. who are dissatisfied with the Prime Minister or, in my opinion, the 99 per cent. who are dissatisfied with the hon. Member for Stirling (Mr. Forsyth)?

Mr. Canavan: I am one of the constituents of the hon. Member for Stirling. I remember him coming out in support of the Transport and General Workers Union at Bannockburn bus garage and saying that he would be in favour of a trade union workers' co-operative taking it over.
I should be interested to know whether the Minister —the hon. Member for Stirling—still supports the TGWU at that garage, of whether he is now intent, like the Duke of Hamilton's brother and the Secretary of State for Scotland and all the rest, on selling off the Scottish Bus Group to the richest buyer who comes along. I am waiting for the hon. Member for Stirling to come in on this, but he will be a wee bit embarrassed, because he would not be the hon. Member for Stirling if it were not for the Tory influence through the establishment and the old boy network whereby Sheriff Principal Taylor put a gerrymandering exercise into effect and made Stirling a winnable seat for the hon. Gentleman, and brought him here not just as a Member of Parliament but as Minister for this, that and the other. That is the way in which the Tory party is operating in Scotland at present, not just gerrymandering but mishandling many important public services—health, education and the public transport services that we are discussing tonight.

Mr. Jim Sillars: Did the hon. Gentleman hear the Minister say in his winding-up speech —I was fascinated and hung on every word—that the Bill was part of the Tory party's plan to give the Scottish people their rightful destiny? Would he care to comment on exactly how the Tories interpret their right to give the Scottish people their rightful destiny, in relation to their mandate?

Mr. Canavan: I do not understand how on earth the present Government claim to have a mandate for anything from the people of Scotland. If they are delivering anything at all to the people of Scotland, it is poverty, deprivation and increasing injustice—and, in this instance, a rundown in our public transport services which, although not perfect, have served the people of Scotland very well over many years.
A straw poll, or even an accurate opinion poll—or a local or general election—on public transport alone would, I think, reveal that the vast majority of people in Scotland were in favour of public ownership. That would be not for doctrinaire reasons, but for the simple reason that in their experience it has served them, their families and the work force. It has served many shoppers and commuters who cannot afford the chauffeur-driven cars that Ministers have, and thus rely on reasonable standards of public transport with reasonable fares. If that involves subsidy or cross-subsidy, I am very much in favour of it.

Mr. David Marshall: Will my hon. Friend give way?

Mr. Canavan: Yes, I shall give way to my hon. Friend, who has much more knowledge of public transport than I have, having been brought up with it.

Mr. Marshall: My hon. Friend referred to the problems that the Bill would pose for companies in his constituency. Earlier I mentioned the firm of Walter Alexander, coach and bus builders, which is in his constituency. Clearly he is more familiar with the firm's problems than I am. Would he care to elaborate on the problems that the Bill will cause for it?

Mr. Canavan: I understand that my hon. Friend began his working life as a bus conductor.

Mr. Marshall: A tram conductor.

Mr. Canavan: A tram conductor. My hon. Friend was also educated in my constituency, at Larbert high school and other illustrious educational establishments in the area. I know that as a result he can speak with great eloquence and expertise about public transport in Scotland. I have the Scottish Midland bus group in my constituency and the Walter Alexander coachbuilding company. The Bill will obviously have a knock-on, or should I say knock-off, effect on the coach building industry.
A year ago I led a delegation from Scottish Bus Group Engineering Ltd, one of the subsidiaries of the Scottish Transport Group. The Minister will remember that because I went along with local authority and trade union representatives on behalf of the work force at the Scottish Bus Group which is located in Glasgow road, Falkirk. We feared that the Scottish Bus Group was planning to close down the operation in Glasgow road, Falkirk because privatisation was, as I described it at the meeting with the Minister, "just around the corner".
The Secretary of State is conversing and perhaps conspiring with the Government Whip. He probably wonders what time the debate will finish. The cards are in our hands for a change, and I will carry on regardless. If the Secretary of State wants to get his troops home early to their beds tonight, we deserve a better reply to the debate than that we received from the Duke of Hamilton's wee brother. He has probably never been on a bus in his

life. I have certainly never seen him on a bus in Bannockburn. [Interruption.] Perhaps the Minister will correct me later if I am wrong.

Mr. Sillars: On a point of order, Madam Deputy Speaker. I am trying to listen to the hon. Member for Falkirk, West (Mr. Canavan) who is making a valuable contribution to the debate. May I remind you that earlier this evening you asked several Conservative Members who continued to talk through speeches to remove themselves from the Chamber and talk elsewhere?

Madam Deputy Speaker: I need no reminding. Three times this evening I have asked hon. Members who wish to carry on conversations to do so on the other side of the swing doors.

Mr. Canavan: I was talking about the Government's lack of mandate in Scotland for their transport policies particularly the Bill. As you probably know, Madam Deputy Speaker, I have been rather outspoken about the abuse of patronage powers by the Government and the increasing abuse of those powers since they were rejected by 76 per cent. of Scottish people at the general election. I have referred to the Secretary of State using his patronage powers as a job creation scheme for failed Tory Members of Parliament, whether it is Michael Ancram, John MacKay—

Mr. Bill Walker: On a point of order, Madam Deputy Speaker. Like you, I have been trying to relate the hon. Gentleman's speech to the contents of the Bill. I can see nothing in the Bill about the jobs that the hon. Gentleman has mentioned.

Madam Deputy Speaker: The hon. Gentleman knows that Second Reading debates are fairly wide-ranging. I am therefore very tolerant.

Mr. Canavan: For once, the hon. Member for Tayside, North (Mr. Walker) has made a fair point. I do not intend to elaborate on the use of the patronage powers with regard to Alex Fletcher, Anna McCurley and Peter Fraser. Last week, I met John Corrie who was kicked out by my hon. Friend the Member for Cunninghame, North (Mr. Wilson). John Corrie told me that he had been appointed a member of the Transport Users Consultative Committee for Scotland. [HON. MEMBERS: "Chairman."] Yes, chairman. I could not believe it. I asked him, "When were you last on a bus?" but he ran away from me on his horse. [Interruption.] I was on a bus last week. I frequently travel by bus. I have little option.
We ought to investigate in Committee how people like John Corrie are appointed to such positions. I do not criticise the man personally; all of us have our attributes, but for his constituents, he certainly kept his light hidden under a bushel. That is why my hon. Friend the Member for Cunninghame, North is now sitting on the Opposition Front Bench.
The Government are using their powers of patronage in a very despotic manner in an attempt to disestablish public transport and to appoint people who have no experience of public transport matters to such positions.

Mr. Salmond: I suspect that John Corrie's interest in public transport is similar to Michael Ancram's sudden interest in public housing. Does the hon. Member believe that the support for this measure in Scotland is greater or


less than the 19 per cent. that was accorded to the Conservative party in the most recent Scottish opinion poll?

Mr. Canavan: I think that support in Scotland for this measure is even less than the abysmal 19 per cent. support for the Tory party in the most recent opinion poll. Support for the Tory party in Scotland will, I suggest, become even weaker as the weeks and months go by.
Earlier, before I was so rudely interrupted by some Conservative Members, I was reminding the Minister about a delegation that visited him at St. Andrew's house about a year ago. It consisted of representatives from the Central regional council and members of the Transport and General Workers Union and other trade unions at Scottish Bus Group Engineering Ltd. in Falkirk. I think I told the Minister after that meeting that never before—I have been a Member of Parliament for 14 years and I have led delegations to Ministers in Governments of both political complexions—had any Minister's performance been so incompetent. He sat there, as he did tonight, and just read the brief that had been prepared for him by civil servants.
My local government friends were there, as were my friends and comrades from the trade union movement. [Laughter.] Hon. Members laugh. [HON. MEMBERS: "Not at you."] People's livelihoods were at stake. I went along to the Minister, but all I got was a lot of guff. It was all prepared. We were told, "Oh, you must understand this, that and the next thing. All this has been written down by the Scottish Office." It was utterly incredible. I do not know whether it is possible for the Minister to reply later with the leave of the House, but his previous reply was as unsatisfactory as what he said at St. Andrew's house.

Mr. David Lambie: Before my hon. Friend finishes his speech, would he care to comment on the Government's decision to transfer CalMac's headquarters to Oban? Like my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham), I think that it is a bad decision. When the Select Committee on Scottish Affairs investigated road passenger transport and ferries, it visited Tromso in Norway. Tromso is inside the Arctic circle, and the Norwegian Government built a new university there, which resulted in it becoming a centre of economic activity.

Madam Deputy Speaker: Order. This is very interesting but it is an intervention, not a speech.

Mr. Lambie: I am not making a speech. I am drawing my hon. Friend's attention to the fact that, when the Norwegian Government made Tromso the centre for a university, they made it a centre of economic activity in northern Norway, which draws people to the area. If the Government are to transfer the CalMac headquarters, why do they not transfer them from Gourock to Stornoway, and make Stornoway a centre of economic activity? That would revitalise the whole of the Western Isles. Would my hon. Friend care to comment on that point, which I think legitimate?

Mr. Canavan: I do not want to digress at this time of the morning, and I shall come a little nearer home. I remember when we had a Labour Prime Minister who took the Gourock-Dunoon ferry to the Labour party conference at Dunoon. He did not manage to sink that boat. I am sorry that my right hon. Friend Lord Callaghan is not here.
The Government are shifting the CalMac headquarters from Gourock to Oban because the old Tory Member for the area has been displaced by the new hon. Member for Argyll and Bute (Mrs. Michie). They are playing the old patronage game again. The Tories are desperate to win the seat back again, so they are shifting everything to Oban so that they can get MacKay back here. He would be an even bigger disaster than the Minister.
I have seen a lot of incompetent Ministers of various political complexions in my time, and I have just told the Minister what I think of him, but at least he is a nice man. He always has a nice smile when we go to see him. He gives nothing, though. MacKay is a horrible creature. He does not even smile and gives nothing. If fact he kicks us in the teeth. He has certainly kicked working-class people in Scotland in the teeth for many years.

Mr. Salmond: On a point of order, Madam Deputy Speaker. The hon. Member for Falkirk, West (Mr. Canavan) has had to put up with a great deal of provocation during the debate, but is it really in order for the hon. Member for Crawley (Mr. Soames) who has just left the Chamber, to sit through the debate waving his socks at the hon. Member for Falkirk, West?

Madam Deputy Speaker: I thought that I had extremely good eyesight, but I never saw that.

Mr. Canavan: I am not worried about socks; I am more worried about the tackety boots that will be on my poor head tomorrow morning.
Before all the interventions, rude, helpful or otherwise, I was telling the House about a delegation which I led to the Prime Minister. After the delegation to St. Andrew's house, which had a most unsatisfactory outcome, I decided to take on the Prime Minister herself. The Prime Minister was on record as saying that any hon. Member who was faced with a closure in his or her constituency was entitled to an audience with her. Because of the proposed closure of Scottish Bus Group Engineering Ltd. in my patch, I decided to take the matter up with the Prime Minister. I asked whether the delegation could include representatives from the trade union and from the local authority.
In view of her public commitment, the Prime Minister had to accede to my request and meet me, but my constituents and I were bitterly disappointed when she refused to meet representatives of the trade union representing the work force and representatives from the central regional council and from Falkirk district council who were experienced in such situations and wanted to provide support in the form of increased public investment at local authority level to keep the plant going.
Imagine my surprise a year ago, when the Prime Minister's private office wrote to me saying, "Dear Mr. Canavan, I am sorry but the trade unionists and those horrible local authority people cannot come along." However, I was invited to meet the Prime Minister, and who did I see in the waiting room but the Under-Secretary of State, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), who was acting as the Prime Minister's lap dog. I went in and I was surprised when the Prime Minister offered me a cup of tea. She even offered me milk to put in it, which was incredible considering what she did about the bairns' milk in schools many years ago. I do not take milk in my tea.


I sat down with the Prime Minister. I thought that I would get some support for the Scottish bus industry from the Minister. I thought that he was there with his mandate on behalf of the people of Scotland. I thought that his main remit, his main criterion, and his top priority would have been to present the case of the people of Scotland, including my constituents, as the Scottish Bus Group Engineering Ltd. workplace in my constituency was not just a parochial interest, but had repercussions throughout the Scottish economy in that the service offered by my constituents was of great advantage to consumers throughout the rest of Scotland.
I could not believe it—the Minister sat there and supped his tea, with milk and sugar. He smiled at the Prime Minister and reiterated the Government's case. He did nothing to fight for Scottish jobs in my constituency or elsewhere. I had had great respect for the hon. Gentleman. I know that he came from a great fighting clan which turned up on horseback before the buses came to Bannockburn. Some of the Douglases and Hamiltons changed their jerseys at half-time to ensure that they were on the winning side. Robert the Bruce gave out land throughout Scotland. Some of the Douglases—not the working-class Douglases, but the Hamiltonian Douglases —have benefited ever since. They have never needed the buses, or their horses, except to hunt the poor wee foxes at weekends.
It is incumbent on the Minister to tell us in more detail why we should support this nasty legislation, which, like the poll tax, is an attack on most of the lower income groups in Scotland. Has he looked into the effect on the Scottish bus building industry? I say "bus building" rather than "coach building" because I am proud to represent the constituency of Falkirk, West, which has the best bus builders in the world. If the people of Scotland and England do not recognise that, many people throughout the world certainly do. Walter Alexander of Glasgow road, Camelon, is winning export orders in places such as Singapore and Hong Kong and helping to lower the trade deficit.
The Secretary of State does not realise the Bill's international repercussions. He is drafting in all the English Tory Members. They are coming out of the woodwork. Normally, they are pleased to come into the Chamber at Scottish Question Time for a 45-minute stint of "Ha, ha, jolly, jolly, hockey sticks" and ex-public schoolboy behaviour. But I shall keep them from their beds tonight. I hope that some of my hon. Friends will speak after me to punish those Tory Members and ensure that they do not get back to their dormitory and matron. It is about time the matrons and the other English Tories realised the Bill's knock-on effects on Scottish, British and international industry.
My constituents are building double-decker buses. Even in London, public transport leaves much to be desired. We must wait for the findings after the catastrophic accident this week before we make pronouncements about the reasons. People in the south of England could learn a lesson from some aspects of public transport in Scotland.

Mr. Salmond: I discovered recently from a Grampian Television programme that the hon. Member for Tayside, North (Mr. Walker) was an international bus consultant.

Does the hon. Gentleman suspect, as I do, that the hon. Member for Tayside, North might be the guiding hand behind this legislation?

Mr. Canavan: The main contribution of the hon. Member for Tayside, North to transport was crash-landing his glider many years ago. I am sorry about the physical hurt that that caused him. 1 am also sorry about the physical harm that was caused to Lord Hailsham recently and about the accident involving the former Member for Glasgow, Central, the late Tom McMillan.
In the south of England, the standards of public transport are unacceptable and abominable compared with what I would tolerate in my constituency. I would go as far as to say that Tom McMillan would not have died if the standards of public transport in London had been the same as those in Scotland, where, in many areas, those open back-door buses are not acceptable. Getting rid of those buses would improve safety standards and improve job prospects for the workers at Walter Alexander in my constituency.
Insufficient tribute is paid to the worldwide reputation of the Scottish bus-building industry. Many people take double-decker buses for granted and we tend to look on double-decker buses as the norm. A great deal of scientific expertise goes into the building of a double-decker bus and into establishing the exact centre of gravity to minimise the possibility of tilting. It is also necessary to measure the height of the bridges on the routes along which such buses pass.
The cowboy operators who will take advantage of the Bill will not necessarily give the same priority to public safety and the satisfactory construction of buses. My constituents are very concerned about reducing the number of accidents from both the consumer and producer point of view.
Several hon. Members have referred to the effect of the legislation on fares. Will the Minister tell us what is his estimate of the effect on public transport fares? It is all right for the Minister, who has a chauffeur-driven car at his disposal. I must say in the Minister's defence, however, that very occasionally—[Interruption.] He is one of the best of a rotten bunch. I say in the Minister's favour—I have a good word to say about everyone—

The Parliamentary Secretary to the Treasury (Mr. David Waddington): rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 256, Noes 191.

Division No. 18]
[12.20 am


AYES


Adley, Robert
Batiste, Spencer


Aitken, Jonathan
Beaumont-Dark, Anthony


Alexander, Richard
Bellingham, Henry


Alison, Rt Hon Michael
Bendall, Vivian


Allason, Rupert
Bennett, Nicholas (Pembroke)


Amess, David
Benyon, W.


Amos, Alan
Bevan, David Gilroy


Arbuthnot, James
Body, Sir Richard


Arnold, Jacques (Gravesham)
Bonsor, Sir Nicholas


Arnold, Tom (Hazel Grove)
Boscawen, Hon Robert


Ashby, David
Bottomley, Peter


Aspinwall, Jack
Bowden, Gerald (Dulwich)


Atkins, Robert
Bowis, John


Atkinson, David
Boyson, Rt Hon Dr Sir Rhodes


Baker, Nicholas (Dorset N)
Brandon-Bravo, Martin


Baldry, Tony
Brazier, Julian


Banks, Robert (Harrogate)
Bright, Graham






Brown, Michael (Brigg &amp; Cl't's)
Haselhurst, Alan


Browne, John (Winchester)
Hawkins, Christopher


Bruce, Ian (Dorset South)
Hayes, Jerry


Buck, Sir Antony
Hayhoe, Rt Hon Sir Barney


Budgen, Nicholas
Hayward, Robert


Burt, Alistair
Heathcoat-Amory, David


Butcher, John
Heddle, John


Butler, Chris
Hicks, Mrs Maureen (Wolv' NE)


Butterfill, John
Hicks, Robert (Cornwall SE)


Carlisle, Kenneth (Lincoln)
Hill, James


Carrington Matthew
Hind, Kenneth


Carttiss, Michael
Holt, Richard


Cash, William
Hordern, Sir Peter


Chalker, Rt Hon Mrs Lynda
Howarth, Alan (Strat'd-on-A)


Channon, At Hon Paul
Howarth, G. (Cannock &amp; B'wd)


Chapman, Sydney
Howell, Rt Hon David (G'dford)


Chope, Christopher
Howell, Ralph (North Norfolk)



Churchill, Mr
Hughes, Robert G. (Harrow W)


Clark, Dr Michael (Rochford)
Hunt, David (Wirral W)


Clark, Sir W. (Croydon S)
Hunt, John (Ravensbourne)


Colvin, Michael
Hunter, Andrew


Conway, Derek
Irvine, Michael


Coombs, Anthony (Wyre F'rest)
Jack, Michael


Coombs, Simon (Swindon)
Janman, Tim


Cope, Rt Hon John
Jessel, Toby


Couchman, James
Johnson, Smith, Sir Geoffrey


Cran, James
Jones, Robert B (Herts W)


Critchley, Julian
Jopling, Rt Hon Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Key, Robert


Davis, David (Boothferry)
King, Roger (B'ham N'thfield)


Day, Stephen
Kirkhope, Timothy


Devlin, Tim
Knapman, Roger


Dickens, Geoffrey
Knight, Dame Jill (Edgbaston)


Dorrell, Stephen
Knowles, Michael


Douglas-Hamilton, Lord James
Knox, David


Dover, Den
Lang, Ian


Dunn, Bob
Latham, Michael


Durant, Tony
Lawrence, Ivan


Dykes, Hugh
Lennox-Boyd, Hon Mark


Eggar, Tim
Lester, Jim (Broxtowe)


Emery, Sir Peter
Lightbown, David


Evans, David (Welwyn Hatf'd)
Lilley, Peter


Evennett, David
Lord, Michael


Favell, Tony
Luce, Rt Hon Richard


Fenner, Dame Peggy
Lyell, Sir Nicholas


Field, Barry (Isle of Wight)
MacKay, Andrew (E Berkshire)


Fishburn, John Dudley
McLoughlin, Patrick


Fookes, Miss Janet
McNair-Wilson, Sir Michael


Forman, Nigel
McNair-Wilson, P. (New Forest)


Forsyth. Michael (Stirling)
Maginnis, Ken


Forth, Eric
Malins, Humfrey


Franks, Cecil
Mans, Keith


Freeman, Roger
Marland, Paul


French, Douglas
Marshall, Michael (Arundel)


Fry, Peter
Martin, David (Portsmouth S)


Gardiner, George
Mates, Michael


Garel-Jones, Tristan
Maude, Hon Francis


Gill, Christopher
Mawhinney, Dr Brian


Glyn, Dr Alan
Mayhew, Rt Hon Sir Patrick


Goodhart, Sir Philip
Meyer, Sir Anthony


Goodlad, Alastair
Miller, Sir Hal


Goodson-Wickes, Dr Charles
Mitchell, Andrew (Gedling)


Gorman. Mrs Teresa
Mitchell, Sir David


Gow, Ian
Moate, Roger


Gower, Sir Raymond
Monro, Sir Hector


Grant, Sir Anthony (CambsSW)
Montgomery, Sir Fergus


Greenway, Harry (Ealing N)
Moore, Rt Hon John


Greenway, John (Ryedale)
Morris, M (N'hampton S)


Griffiths, Peter (Portsmouth N)
Morrison, Sir Charles


Grist, Ian
Morrison, Rt Hon P (Chester)


Ground, Patrick
Moss, Malcolm


Grylls, Michael
Moynihan Hon Colin


Hamilton, Hon Archie (Epsom)
Neale, Gerrard


Hamilton, Neil (Tatton)
Needham, Richard


Hampson, Dr Keith
Nelson, Anthony


Hanley, Jeremy
Neubert, Michael


Hannam, John
Nicholls, Patrick


Hargreaves, A. (B'ham H'll Gr')
Nicholson, David (Taunton)


Hargreaves, Ken (Hyndburn)
Nicholson, Emma (Devon West)


Harris, David
Onslow, Rt Hon Cranley





Oppenheim, Phillip
Soames, Hon Nicholas


Paice, James
Speller, Tony


Patnick, Irvine
Spicer, Sir Jim (Dorset W)


Pawsey, James
Spicer, Michael (S Worcs)


Peacock, Mrs Elizabeth
Squire, Robin


Porter, Barry (Wirral S)
Stanbrook, Ivor


Porter, David (Waveney)
Steen, Anthony


Portillo, Michael
Stern, Michael


Price, Sir David
Stevens, Lewis


Raffan, Keith
Stewart, Allan (Eastwood)


Redwood, John
Stewart, Andy (Sherwood)


Renton, Tim
Stewart, Ian (Hertfordshire N)


Rhodes James, Robert
Stokes, Sir John


Riddick, Graham
Stradling, Thomas, Sir John


Ridsdale, Sir Julian
Summerson, Hugo


Rifkind, Rt Hon Malcolm
Taylor, John M (Solihull)


Roberts, Wyn (Conwy)
Temple-Morris, Peter


Roe, Mrs Marion
Thompson, D. (Calder Valley)


Rost, Peter
Thorne, Neil


Rumbold, Mrs Angela
Thurnham, Peter


Sackville, Hon Tom
Waddington, Rt Hon David


Sayeed, Jonathan
Walker, Bill (T'side North)


Shaw, David (Dover)
Waller, Gary


Shaw, Sir Giles (Pudsey)
Wells, Bowen


Shaw, Sir Michael (Scarb')
Wheeler, John


Shephard, Mrs G. (Norfolk SW)
Widdecombe, Ann


Shepherd, Colin (Hereford)
Wiggin, Jerry


Shepherd, Richard (Aldridge)
Wood, Timothy


Shersby, Michael
Woodcock, Mike


Sims, Roger



Skeet, Sir Trevor
Tellers for the Ayes:


Smith, Sir Dudley (Warwick)
Mr. David Maclean and


Smith, Tim (Beaconsfield)
Mr. Michael Fallon.




NOES


Abbott, Ms Diane
Dixon, Don


Adams, Allen (Paisley N)
Dobson, Frank


Anderson, Donald
Doran, Frank


Archer, Rt Hon Peter
Douglas, Dick


Armstrong, Hilary
Duffy, A. E. P.


Banks, Tony (Newham NW)
Dunnachie, Jimmy


Barnes, Harry (Derbyshire NE)
Dunwoody, Hon Mrs Gwyneth


Beckett, Margaret
Eadie, Alexander


Beggs, Roy
Evans, John (St Helens N)


Bell, Stuart
Ewing, Harry (Falkirk E)


Bennett, A. F. (D'nt'n &amp; R'dish)
Ewing, Mrs Margaret (Moray)


Bermingham, Gerald
Fatchett, Derek


Bidwell, Sydney
Field, Frank (Birkenhead)


Blair, Tony
Fields, Terry (L'pool B G'n)


Boateng, Paul
Fisher, Mark


Bradley, Keith
Flannery, Martin


Bray, Dr Jeremy
Flynn, Paul


Brown, Gordon (D'mline E)
Foot, Rt Hon Michael


Brown, Nicholas (Newcastle E)
Foster, Derek


Brown, Ron (Edinburgh Leith)
Foulkes, George


Buchan, Norman
Fraser, John


Buckley, George J.
Fyfe, Maria


Caborn, Richard
Galbraith, Sam


Callaghan, Jim
Galloway, George


Campbell, Menzies (Fife NE)
Garrett, John (Norwich South)


Campbell, Ron (Blyth Valley)
Garrett, Ted (Wallsend)


Canavan, Dennis
Gilbert, Rt Hon Dr John


Clark, Dr David (S Shields)
Golding, Mrs Llin


Clarke, Tom (Monklands W)
Gordon, Mildred


Clay, Bob
Gould, Bryan


Clelland, David
Graham, Thomas


Cohen, Harry
Grant, Bernie (Tottenham)


Cook, Frank (Stockton N)
Griffiths, Win (Bridgend)


Cook, Robin (Livingston)
Grocott, Bruce


Corbyn, Jeremy
Hardy, Peter


Cousins, Jim
Hattersley, Rt Hon Roy


Cox, Tom
Haffer, Eric S.


Crowther, Stan
Henderson, Doug


Cryer, Bob
Hinchliffe, David


Cummings, John
Holland, Stuart


Cunningham, Dr John
Home, Robertson, John


Dalyell, Tam
Hood, Jimmy


Darling, Alistair
Howarth, Geroge (Knowsley N)


Davies, Rt Hon Denzil (Llanelli)
Howells, Geraint


Davies, Ron (Caerphilly)
Hoyle, Doug






Hughes, John (Coventry NE)
Patchett, Terry


Hughes, Robert (Aberdeen N)
Pendry, Tom


Hughes, Roy (Newport E)
Pike, Peter L.


Hughes, Sean (Knowsley S)
Powell, Ray (Ogmore)


Illsley, Eric
Prescott, John


Ingram, Adam
Quin, Ms Joyce


Janner, Greville
Radice, Giles


Jones, Martyn (Clwyd S W)
Randall, Stuart


Kaufman, Rt Hon Gerald
Rees, Rt Hon Merlyn


Lambie, David
Reid, Dr John


Lamond, James
Richardson, Jo


Leadbitter, Ted
Robertson, George


Leighton, Ron
Robinson, Geoffrey


Lestor, Joan (Eccles)
Ross, Ernie (Dundee W)


Lewis, Terry
Ross, William (Londonderry E)


Litherland, Robert
Rowlands, Ted


Lloyd, Tony (Stretford)
Ruddock, Joan


Lofthouse, Geoffrey
Salmond, Alex


Loyden, Eddie
Sedgemore, Brian


McAllion, John
Sheerman, Barry


McAvoy, Thomas
Sheldon, Rt Hon Robert


Macdonald, Calum A.
Shore, Rt Hon Peter


McFall, John
Short, Clare


McKay, Allen (Barnsley West)
Sillars, Jim


McKelvey, William
Skinner, Dennis


McLeish, Henry
Smith, Andrew (Oxford E)


McNamara, Kevin
Smith, C. (Isl'ton &amp; F'bury)


McTaggart, Bob
Spearing, Nigel


McWilliam, John
Steinberg, Gerry


Madden, Max
Strang, Gavin


Mahon, Mrs Alice
Taylor, Mrs Ann (Dewsbury)


Marek, Dr John
Thompson, Jack (Wansbeck)


Marshall, David (Shettleston)
Turner, Dennis


Marshall, Jim (Leicester S)
Vaz, Keith


Martin, Michael J. (Springburn)
Wall Pat


Martlew, Eric
Wallace, James


Maxton, John
Walley, Joan


Meacher, Michael
Wardell, Gareth (Gower)


Meale, Alan
Wareing, Robert N.


Michael, Alun
Welsh, Michael (Doncaster N)


Michie, Bill (Sheffield Heeley)
Williams, Rt Hon Alan


Michie, Mrs Ray (Arg'l &amp; Bute)
Williams, Alan W. (Carm'then)


Moonie, Dr Lewis
Wilson, Brian


Morgan, Rhodri
Winnick, David


Morley, Elliott
Wise, Mrs Audrey


Morris, Rt Hon A. (W'shawe)
Worthington, Tony


Mowlam, Marjorie
Wray, Jimmy


Mullin, Chris
Young, David (Bolton SE)


Murphy, Paul



Nellist, Dave
Tellers for the Noes:


O'Brien, William
Mr. Ken Eastham and


O'Neill, Martin
Mr. Frank Haynes.


Orme, Rt Hon Stanley

Question accordingly agreed to.

Question put accordingly, That the Bill be now read a Second time:—

The House diveded: Ayes 257, Noes 189.

Division No. 19]
[12.33 am


AYES


Adley, Robert
Beaumont-Dark, Anthony


Aitken, Jonathan
Bellingham, Henry


Alexander, Richard
Bendall, Vivian


Alison, Rt Hon Michael
Bennett, Nicholas, (Pembroke)


Allason, Rupert
Benyon, W.


Amess, David
Bevan, David Gilroy


Amos, Alan
Body, Sir Richard


Arbuthnot, James
Bonsor, Sir Nicholas


Arnold, Jacques (Gravesham)
Boscawen, Hon Robert


Arnold, Tom (Hazel Grove)
Bottomley, Peter


Ashby, David
Bowden, Gerald (Dulwich)


Aspinwall, Jack
Bowis, John


Atkins, Robert
Boyson, Rt Hon Dr Sir Rhodes


Atkinson, David
Brandon-Bravo, Martin


Baker, Nicholas (Dorset N)
Brazier, Julian


Baldry, Tony
Bright, Graham


Banks, Robert (Harrogate)
Brown, Michael (Brigg &amp; Cl't's)


Batiste, Spencer
Browne, John (Winchester)





Bruce, Ian (Dorset South)
Haselhurst, Alan


Buck, Sir Antony
Hawkins, Christopher


Budgen, Nicholas
Hayes, Jerry


Burt, Alistair
Hayhoe, Rt Hon Sir Barney


Butcher, John
Hayward, Robert


Butler, Chris
Heathcoat-Amory, David


Butterfill, John
Heddle, John


Campbell, Menzies (Fife NE)
Hicks, Mrs Maureen (Wolv' NE)


Carlisle, Kenneth (Lincoln)
Hicks, Robert (Cornwall SE)


Carrington, Matthew
Hill, James


Carttiss, Michael
Hind, Kenneth


Cash, William
Holt, Richard


Chalker, Rt Hon Mrs Lynda
Hordern, Sir Peter


Channon, Rt Hon Paul
Howarth, Alan, (Strat'd-on-A)


Chapman, Sydney
Howarth, G. (Cannock &amp; B'wd)


Chope, Christopher
Howell, Ralph (North Norfolk)


Churchill, Mr
Howell, Geraint


Clark, Dr Michael (Rochford)
Howells, Geraint


Clark, Sir W. (Croydon S)
Hughes, Robert G. (Harrow W)


Colvin, Michael
Hunt, David (Wirral W)


Conway, Derek
Hunt, John (Ravensbourne)


Coombs, Anthony (Wyre F'rest)
Hunter, Andrew


Coombs, Simon (Swindon)
Irvine, Michael


Cope, Rt Hon John
Jack, Michael


Couchman, James
Janman, Tim


Cran, James
Jessel, Toby


Critchley, Julian
Johnson Smith, Sir Geoffrey


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Robert B (Herts W)


Davis, David (Boothferry)
Jopling, Rt Hon Michael


Day, Stephen
Key, Robert


Devlin, Tim
King, Roger (B'ham N'thfield)


Dickens, Geoffrey
Kirkhope, Timothy


Dorrell, Stephen
Knapman, Roger


Douglas-Hamilton, Lord James
Knight, Dame Jill (Edgbaston)


Dover, Den
Knowles, Michael


Dunn, Bob
Knox, David


Durant, Tony
Lang, Ian


Dykes, Hugh
Latham, Michael


Eggar, Tim
Lawrence, Ivan


Emery, Sir Peter
Lennox-Boyd, Hon Mark


Evans, David (Welwyn Hatf'd)
Lester, Jim (Broxtowe)


Evennett, David
Lilley, Peter


Fallon, Michael
Lord, Michael


Favell, Tony
Luce, Rt Hon Richard


Fenner, Dame Peggy
Lyell, Sir Nicholas


Field, Barry (Isle of Wight)
MacKay, Andrew (E Berkshire)


Fishburn, John Dudley
McLoughlin, Patrick


Fookes, Miss Janet
McNair-Wilson, Sir Michael


Forman, Nigel
McNair-Wilson, P. (New Forest)


Forsyth, Michael (Stirling)
Malins, Humfrey


Forth, Eric
Mans, Keith


Franks, Cecil
Marland, Paul


Freeman, Roger
Marshall, Michael (Arundel)


French, Douglas
Martin, David (Portsmouth S)


Fry, Peter
Maude, Hon Francis


Gardiner, George
Mawhinney, Dr Brian


Garel-Jones, Tristan
Mayhew, Rt Hon Sir Patrick


Gill, Christopher
Meyer, Sir Anthony


Glyn, Dr Alan
Michie, Mrs Ray (Arg'l &amp; Bute)


Goodhart, Sir Philip
Miller, Sir Hal


Goodlad, Alastair
Mitchell, Andrew (Gedling)


Goodson-Wickes, Dr Charles
Mitchell, Sir David


Gorman, Mrs Teresa
Moate, Roger


Gow, Ian
Monro, Sir Hector


Gower, Sir Raymond
Montgomery, Sir Fergus


Grant, Sir Anthony (CambsSW)
Moore, Rt Hon John


Greenway, Harry (Ealing N)
Morris, M (N'hampton S)


Greenway, John (Ryedale)
Morrison, Sir Charles


Griffiths, Peter (Portsmouth N)
Morrison, Rt Hon P (Chester)


Grist, Ian
Moss, Malcolm


Ground, Patrick
Moynihan, Hon Colin


Grylls, Michael
Neale, Gerrard


Hamilton, Hon Archie (Epsom)
Needham, Richard


Hamilton, Neil (Tatton)
Nelson, Anthony


Hampson, Dr Keith
Neubert, Michael


Hanley, Jeremy
Nicholls, Patrick


Hannam, John
Nicholson, David (Taunton)


Hargreaves, A. (B'ham H'll Gr')
Nicholson, Emma (Devon West)


Hargreaves, Ken (Hyndburn)
Onslow, Rt Hon Cranley


Harris, David
Oppenheim, Phillip






Paice, James
Spicer, Sir Jim (Dorset W)


Patnick, Irvine
Spicer, Michael (S Worcs)


Pawsey, James
Squire, Robin


Peacock, Mrs Elizabeth
Stanbrook, Ivor


Porter, Barry (Wirral S)
Steen, Anthony


Porter, David (Waveney)
Stern, Michael


Portillo, Michael
Stevens, Lewis


Price, Sir David
Stewart, Allan (Eastwood)


Raffan, Keith
Stewart, Andy (Sherwood)


Redwood, John
Stewart, Ian (Hertfordshire N)


Renton, Tim
Stokes, Sir John


Rhodes James, Robert
Stradling Thomas, Sir John


Riddick, Graham
Summerson, Hugo


Ridsdale, Sir Julian
Taylor, John M (Solihull)


Rifkind, Rt Hon Malcolm
Temple-Morris, Peter


Roberts, Wyn (Conwy)
Thompson, D. (Calder Valley)


Roe, Mrs Marion
Thorne, Neil


Rost, Peter
Thurnham, Peter


Rumbold, Mrs Angela
Waddington, Rt Hon David


Sackville, Hon Tom
Walker, Bill (T'side North)


Sayeed, Jonathan
Wallace, James


Shaw, David (Dover)
Waller, Gary


Shaw, Sir Giles (Pudsey)
Wells, Bowen


Shaw, Sir Michael (Scarb')
Wheeler, John


Shephard, Mrs G. (Norfolk SW)
Widdecombe, Ann


Shepherd, Colin (Hereford)
Wiggin, Jerry


Shepherd, Richard (Aldridge)
Wood, Timothy


Shersby, Michael
Woodcock, Mike


Sims, Roger



Skeet, Sir Trevor
Tellers for the Ayes:


Smith, Sir Dudley (Warwick)
Mr. David Lightbown and


Smith, Tim (Beaconsfield)
Mr. David Maclean.


Speller, Tony





NOES


Abbott, Ms Diane
Davis, Terry (B'ham Hodge H'l)


Adams, Allen (Paisley N)
Dixon, Don


Allen, Graham
Dobson, Frank


Anderson, Donald
Doran, Frank


Archer, Rt Hon Peter
Douglas, Dick


Armstrong, Hilary
Duffy, A. E. P.


Banks, Tony (Newham NW)
Dunnachie, Jimmy


Barnes, Harry (Derbyshire NE)
Dunwoody, Hon Mrs Gwyneth


Beckett, Margaret
Eadie, Alexander


Beggs, Roy
Evans, John (St Helens N)


Bell, Stuart
Ewing, Harry (Falkirk E)


Bennett, A. F. (D'nt'n &amp; R'dish)
Ewing, Mrs Margaret (Moray)


Bermingham, Gerald
Fatchett, Derek


Bidwell, Sydney
Field, Frank (Birkenhead)


Blair, Tony
Fields, Terry (L'pool B G'n)


Boateng, Paul
Fisher, Mark


Boyes, Roland
Flannery, Martin


Bradley, Keith
Flynn, Paul


Bray, Dr Jeremy
Foot, Rt Hon Michael


Brown, Gordon (D'mline E)
Foster, Derek


Brown, Nicholas (Newcastle E)
Foulkes, George


Buchan, Norman
Fraser, John


Buckley, George J.
Fyfe, Maria


Caborn, Richard
Galbraith, Sam


Callaghan, Jim
Galloway, George


Campbell, Ron (Blyth Valley)
Garrett, John (Norwich South)


Canavan, Dennis
Garrett, Ted (Wallsend)


Clark, Dr David (S Shields)
Gilbert, Rt Hon Dr John


Clarke, Tom (Monklands W)
Golding, Mrs Llin


Clay, Bob
Gordon, Mildred


Clelland, David
Gould, Bryan


Clwyd, Mrs Ann
Graham, Thomas


Cohen, Harry
Grant, Bernie (Tottenham)


Cook, Frank (Stockton N)
Grant, Bernie (Tottenham)


Cook, Robin (Livingston)
Griffiths, Win (Bridgend)


Corbyn, Jeremy
Hardy, Peter


Cousins, Jim
Hattersley, Rt Hon Roy


Cox, Tom
Heffer, Eric S.


Cryer, Bob
Henderson, Doug


Cummings, John
Hinchliffe, David


Cunningham, Dr John
Hogg, N. (C'nauld &amp; Kilsyth)


Dalyell, Tam
Holland, Stuart


Darling, Alistair
Home, Robertson, John


Davies, Rt Hon Denzil (Llanelli)
Hood, Jimmy


Davies, Ron (Caerphilly)
Howarth, George (Knowsley N)





Hoyle, Doug
Patchett, Terry


Hughes, John (Coventry NE)
Pendry, Tom


Hughes, Robert (Aberdeen N)
Pike, Peter L.


Hughes, Roy (Newport E)
Powell, Ray (Ogmore)


Hughes, Sean (Knowsley S)
Prescott, John


Illsley, Eric
Quin, Ms Joyce


Ingram, Adam
Radice, Giles


Janner, Greville
Randall, Stuart


Jones, Martyn (Clwyd S W)
Rees, Rt Hon Merlyn


Kaufman, Rt Hon Gerald
Reid, Dr John


Lambie, David
Richardson, Jo


Lamond, James
Robertson, George


Leadbitter, Ted
Robinson, Geoffrey


Leighton, Ron
Ross, Ernie (Dundee W)


Lestor, Joan (Eccles)
Ross, William (Londonderry E)


Lewis, Terry
Rowlands, Ted


Litherland, Robert
Ruddock, Joan


Lloyd, Tony (Stretford)
Salmond, Alex


Lofthouse, Geoffrey
Sedgemore, Brian


Loyden, Eddie
Sheerman, Barry


McAllion, John
Sheldon, Rt Hon Robert


McAvoy, Thomas
Shore, Rt Hon Peter


Macdonald, Calum A.
Short, Clare


McFall, John
Sillars, Jim


McKay, Allen (Barnsley West)
Skinner, Dennis


McKelvey, William
Smith, Andrew (Oxford E)


McLeish, Henry
Smith, C. (Isl'ton &amp; F'bury)


McNamara, Kevin
Spearing, Nigel


McTaggart, Bob
Steinberg, Gerry


McWilliam, John
Strang, Gavin


Madden, Max
Taylor, Mrs Ann (Dewsbury)


Mahon, Mrs Alice
Thompson, Jack (Wansbeck)


Marek, Dr John
Turner, Dennis


Marshall, David (Shettleston)
Vaz, Keith


Marshall, Jim (Leicester S)
Wall, Pat


Martin, Michael J. (Springburn)
Walley, Joan


Martlew, Eric
Wardell, Gareth (Gower)


Maxton, John
Wareing, Robert N.


Meacher, Michael
Welsh, Michael (Doncaster N)


Meale, Alan
Williams, Rt Hon Alan


Michael, Alun
Williams, Alan W.(Carm'then)


Michie, Bill (Sheffield Heeley)
Wilson, Brian


Moonie, Dr Lewis
Winnick, David


Morgan, Rhodri
Wise, Mrs Audrey


Morley, Elliott
Worthington, Tony


Morris, Rt Hon A. (W'shawe)
Wray, Jimmy


Mowlam, Marjorie
Young, David (Bolton SE)


Mullin, Chris



Murphy, Paul
Tellers for the Noes:


Nellist, Dave
Mr. Frank Haynes and


O'Brien, William
Mr. Ken Eastham.


O'Neill, Martin

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Mr. Sillars:: On a point of order, Mr. Deputy Speaker. I do not imagine that I am the only right hon. or hon. Member who witnessed an altercation just before the Division, when the hon. Member for Wirral, South (Mr. Porter) took a totally unprovoked swing at the hon. Member for Glasgow, Hillhead (Mr. Galloway). I wonder whether you, Mr. Deputy Speaker, will rule on whether that was unparliamentary conduct.

Mr. Brian Sedgemore: Further to that point of order, Mr. Deputy Speaker. I want to be helpful, because I witnessed three, or possibly four, criminal offences. I witnessed the offences of assault, battery, conduct likely to cause a breach of the peace, and possibly the offence of unlawful assembly. It occurs to me that there are three ways of dealing with those matters—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I hope that the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) will leave the matter for me to deal with. An allegation has been made that an hon. Member engaged in disorderly conduct. No such incident has been reported to me. If it occurred, it should have been raised at the time. I cannot rule retrospectively.

Orders of the Day — Transport (Scotland) Bill [Money]

Queen's recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Transport (Scotland) Bill, it is expedient to authorise—

(a) the payment out of money provided by Parliament of—

(i) any expenditure of the Secretary of State in connection with the dissolution of the Scottish Transport Group;
(ii) sums required for fulfilling any guarantee given by the Secretary of State in respect of sums borrowed by Caledonian MacBrayne Limited, David MacBrayne Limited and any subsidiary of theirs;
(iii) any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of the Act; and
(iv) any increase attributable to the Act in payments out of money so provided under any other enactment;

(b) any payment into the Consolidated Fund under the Act.—[Mr. Fallon.]

Mr. Brian Wilson: We are not minded to wave this money resolution through and to make available on the nod the money that is required to put into effect legislation that my right hon. and hon. Friends have argued against for the past five and a half hours. It would be inconsistent if we were now to say that the Government are welcome to the money needed to implement legislation of which we strenuously disapprove.

Mr. James Wallace: I am interested to hear the hon. Gentleman deploy that argument. Can he give any indication as to why he and his right hon. and hon. Friends did not vote against the Electricity Bill money resolution last night?

Mr. Deputy Speaker (Mr. Harold Walker): Order. I hope that the hon. Member for Cunninghame, North (Mr. Wilson) will not explain what did not happen last evening, but will restrict himself to tonight's business.

Mr. Wilson: I almost said that I am grateful to you, Mr. Deputy Speaker—but that might have been misunderstood.
The reasons for the money resolution are spelt out in the sub-paragraphs. Sub-paragraph (i) refers to
any expenditure of the Secretary of State in connection with the dissolution of the Scottish Transport Group.
That begs the question why the Scottish Transport Group is being dissolved and why money is required for that purpose. The reason why it is being dissolved is that the Scottish Bus Group, which is the major element in the Scottish Transport Group, is being privatised. So all that is left is the rump of the Scottish Transport Group, which is Caledonian MacBrayne—notwithstanding the threat that part of it, too, will be privatised. The notion of using public funds to break up the Scottish Transport Group, which has served the people of Scotland well and continues doing so, is unacceptable.
What will the expenditure be? What administrative tasks are involved? What will be the cost of those administrative tasks in the dissolution of the Scottish Transport Group, for the purpose of privatising the Scottish Bus Group?

Mr. Martin J. O'Neill: One of the factors to be considered in that process, which my hon. Friend describes in a restrained and careful way—characteristically so, as another of my hon. Friends remarks—is that certain administrative tasks will involve the provision of funds for redundancy payments to large numbers of clerical and administrative staff. At present, they are located in Scotland's central belt, in respect of the CalMac operation. The management side, as represented by the Government, must tell the House—

Mr. Deputy Speaker: Order. If the hon. Gentleman wants to make a speech, perhaps he will try to catch my eye later; otherwise, his intervention should be brief.

Mr. O'Neill: I am sorry, Mr. Deputy Speaker. I know that 1 interrupted my hon. Friend's speech at an early stage, but I felt I should make the point about the Minister's administrative responsibility for the redundancy payments to the people employed by CalMac. I am sorry, Mr. Deputy Speaker, for having done so in a way that was a wee bit overblown.
How much do the Government think will have to be paid to the people working in the central belt of Scotland for the transfer of CalMac's administrative functions to other parts of Scotland? Is not that important?

Mr. Wilson: My hon. Friend raises an extremely important point, for which I am grateful. This legislation will inevitably mean redundancies in Scottish Bus Group and CalMac. As my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) so ably pointed out earlier, CalMac's particular problem is its ill-thought-out removal from Gourock to Oban. As a native of Argyll, I have nothing against Oban—many developments are appropriate for it—but uprooting people and telling them that, on pain of losing their jobs, they will have to move from Gourock to the very different environment of Oban is unacceptable. Redundancy payments will be involved, and we want to know what they will amount to.
Sub-paragraph (ii) of the resolution mentions
sums required for fulfilling any guarantee given by the Secretary of State in respect of sums borrowed by Caledonian MacBrayne Limited, David MacBrayne Limited and any subsidiary of theirs".
On a nostalgic note, I was surprised to learn that the firm of David MacBrayne still exists. My impression was that it had been subsumed into CalMac. At one time there were three or four companies, but I do not want to go into the history of that now—[HoN. MEMBERS: "Why not?"] I must not stray. First, there was the Caledonian Steam Packet Company. Those who are familiar with Clyde waters well remember it. Then there was David MacBrayne Limited, which operated the island ferry routes. Those of us with an interest in these matters remember that MacBrayne vessels always had red funnels, whereas Caledonian Steam Packet vessels had yellow ones.
Then, in the late 1960s, these two companies were brought together in public ownership as Caledonian MacBrayne Ltd. That, however, left two elements outside the operation. There were some smaller vessels: I can think of the Loch Arkaig which continued to ply to some of the small islands. These were purely passenger vessels. Then there were the cargo vessels. I remember in recent years the last of those vessels to operate were the Loch Carron and the Loch Dunvegan, carrying freight from the Clyde around the Hebridean islands. Before that, they were used

to serve the distillery trade on the island of Islay and to carry heavy cargo to the islands. The point is that those vessels remained in the David MacBrayne company.
The fourth element was MacBrayne Haulage, which had also been part of David MacBrayne Ltd. When the main part went into the newly formed Caledonian MacBrayne Ltd, MacBrayne Haulage had to go somewhere else. It was formed as a separate company, still within the state sector and the Scottish Transport Group. So post-nationalisation there were three companies: Caledonian MacBrayne Ltd, David MacBrayne Ltd and MacBrayne Haulage.
The sad thing is that paragraph (a)(ii) of the money resolution contains no reference to MacBrayne Haulage. Hon. Members who were here earlier will be aware of the worrying story that has led to its no longer being mentioned in the resolution. In the most shameful and suspicious circumstances, MacBrayne Haulage was flogged off in a previous privatisation effort, and is now being sold on at a massive profit—as we said at the time would happen.

Mr. Alistair Darling: Is my hon. Friend aware that MacBrayne Haulage had debts at the time of its sale? Does anything in the money resolution allow the public purse to recoup the amount that might have been written off, or reduced, when MacBrayne Haulage was sold to Kildonan? It seems only right that if Billy Walker, or whatever his name is, has made a packet by flogging off public assets we ought to get the money back. It would be outrageous for the public purse to be stripped of so much—and I dare say that the same argument would apply to any debts to be written off relating to any MacBrayne vessels. There is substantial debt, not to mention the money that comes from the EEC.

Mr. Wilson: My hon. Friend strikes the nail on the head. When MacBrayne Haulage was sold off, of course there was debt attaching to it. But the entire circumstances surrounding the sale are, I believe, an embryonic public scandal. As I said earlier, I have asked for those circumstances to be referred to the Public Accounts Committee, and I hope that if any of its members are here they will take note of that and accede to any request that they investigate the matter.
That, then, is why MacBrayne Haulage is not in the picture. But, for the reasons mentioned by my hon. Friend the Member for Edinburgh, Central (Mr. Darling). I am concerned about this phrase in paragraph (a)(ii):
sums required for fulfilling any guarantee given by the Secretary of State in respect of sums borrowed by Caledonian Mac Brayne Limited, David MacBrayne Limited and any subsidiary of theirs".

Mr. Tom Clarke: My hon. Friend is developing his point extremely well, but could he give the House some information that so far has not been given? Could he tell us precisely what the MacBrayne debts might be?
As we are addressing ourselves specifically to the money resolution, may I ask my hon. Friend to consider paragraph (a)(iii), which refers to:
any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of the Act"?
Would that not be almost like a blank cheque, and is it not in stark contrast to the niggardly approach of the Scottish


Office to local government? The Scottish Office certainly would not provide such a blank cheque for anticipated administrative costs.

Mr. Wilson: I shall come to paragraph (a)(iii) in a moment and deal with my hon. Friend's points. First let us wrap up paragraph (a)(ii).
Let me make it clear that, as my hon. Friend the Member for Monklands, West (Mr. Clarke) suggested, I shall be pleased to give way to the Minister at any point if he feels inclined to put figures on the vague concepts that we have before us. What sort of sums borrowed by Caledonian Macbrayne Ltd., David MacBrayne Ltd. and their subsidiaries are we talking about? We know that Ministers still hope that in the future they will be able to sell Caledonian MacBrayne to the private sector. As MacBrayne Haulage had the benefit of a favourable financial deal, will the people who eventually buy any part of Caledonian MacBrayne—if they ever materialise—have a similar financial deal?
I shall now deal with sub-paragraph (ii).

Mr. John Home Robertson: Does my hon. Friend recall that the Minister inadvertently enclosed with a parliamentary reply that he sent to me some time ago information relating to the fact that P and 0 European Ferries was interested in taking over the entire CalMac ferries operation? Is my hon. Friend concerned that, since the Secretary of State is taking CalMac into his hands to sell off under whatever deal he may regard as suitable, he might give his friend Sir Jeffrey Sterling and the other fly-by-nights who operate P and 0 European Ferries an extremely attractive deal at the expense of the public purse?

Mr. Wilson: My hon. Friend is so right that he has persuaded me to stay with sub-paragraph (ii) for a while longer.
Sub-paragraph (1) provides expenditure for the dissolution of the Scottish Transport Group. The Government will then transfer the ownership of Caledonian MacBrayne to the Secretary of State and appoint a board. Nobody here knows who will be on the board, but we could dip into a hat and have a good guess.
Whatever other service was performed tonight by my hon. Friend the Member for Falkirk, West (Mr. Canavan), he told me something that I did not know and which I find extraordinary. He told me about the appointment of my predecessor to the post of chairman of the Scottish Transport Users Consultative Committee. That is fantastic. I could have understood the Government putting him in charge of belted Galloway bulls, but I was interested to find out that he will be in charge of the consultative system in Scotland. I shall be pursuing that further. As my hon. Friend the Member for East Lothian (Mr. Home Robertson) suggests, that is the sort of precedent with which we are dealing.
It is not just the Secretary of State who will be running the new company. I would perhaps have had a little more confidence if the Under-Secretary of State was to have his hand on the tiller. However, it will be the Secretary of State and the board he will appoint. I could take hon. Members on a Cook's tour of the Highlands and Islands and point out the public bodies where every post has been given to

tame Tory nominees. I could point out health boards in places where there is no Tory support but where they have used their local stooges to fill the posts.
I have lived in the Highlands and Islands for most of my life and I remember when the political map of the Highlands and Islands was painted blue. One can look at the area covered by the Highlands and Islands Development Board. In my relatively short political memory, Moray, Nairn, Ross, Cromarty, Argyll, Banff, Inverness, Caithness and Sutherland have been held by Tory Members of Parliament at some time. At present there is not one Government representative in the vast land mass of the Highlands and Islands.

Mr. Tony Favell: On a point of order, Mr. Deputy Speaker. Does this have anything to do with the money resolution? This is an absolute travesty—

Mr. Deputy Speaker: Order. I share the hon. Gentleman's concern. I was beginning to wonder quite what the relationship was. The hon. Member for Cunninghame, North (Mr. Wilson) ought to explain it, or turn to another matter.

Mr. Wilson: Apart from its having something to do with the money resolution, for these Tory appointees in the Highlands and Islands it has something to do with the jackpot. We wonder who the board appointees will be. The new board members of Caledonian MacBrayne will decide what is to be done in the future, particularly about the absurd proposition to sell off the Dunoon to Gourock and the Wemyss bay to Rothesay routes. In that context it is necessary to spell out some of the financial consequences of selling off these routes.
One does not have to be a mathematician or an arithmetician to understand that there is a global subsidy for Caledonian MacBrayne and that the most financially viable routes include the Clyde coast routes. That is why P and 0 is interested. However, P and 0 is not interested in boats that sail to Barra at 6 o'clock on a cold December morning. It is interested only in the short crossings on the Clyde. What will Caledonian MacBrayne be left with if the more profitable or the less loss-making routes are taken away from it? It will be left with those that sustain the higher losses.
The logic of that is inescapable. If any of the Caledonian MacBrayne routes on the Clyde is privatised, either there will be a diminution of service, if the subsidy remains the same, or the subsidy will have to be increased to maintain the remaining services.

Mr. Darling: My hon. Friend has referred to the Clyde crossings. The money resolution does not include the loan debt for the three vessels that currently serve the Clyde crossing—the Saturn, the Jupiter and the Juno. All those vessels were built in the 1970s. They were quite expensive because of their revolutionary design. Does my hon. Friend know how large that loan debt is? Even more important, does he know, if these vessels are to be replaced, as Caledonian MacBrayne is considering, what the loan debt will be if the ships are transferred to a shark who wants to operate the service for his own private gain?

Mr. Wilson: My hon. Friend has again made an extremely good point. These assets have been built up over many years with public money. New ferries are sailing on many of the routes. In many cases, European regional development fund money has been put into them. Are


these vessels to be handed over to the private sector and the sums borrowed by Caledonian MacBrayne to be written off—as paragraph (a)(ii) of the money resolution suggests? Will they be given as a free gift to those who acquire the vessels? We are talking about millions of pounds. If that ever happened—we intend to ensure that it never does—it would result in a further pillaging of the public purse.

Mr. Calum Macdonald: On the financing of the new ferries, did not the Government come up against this problem when they tried to work out a scheme for privatising Caledonian MacBrayne? Most of the money that was provided for the construction of the new ferries and for other infrastructure work came from the EEC. If Caledonian MacBrayne had been privatised, as the Government at one stage obviously intended and wanted to achieve, that money would have been lost. It would have been impossible for that money to be made available by the EEC and then go into the pockets of a private operator.
Is it not true that, when that point was raised in the House, the Government did not know that that would be the case and that the Opposition had to tell them about it? After months had been spent on trying to work out a solution to the problem and after spending enormous sums of money on an expert report to solve it, the Government have still not found a solution. That is why Caledonian MacBrayne is still in public hands.

Mr. Wilson: My hon. Friend is right again. People served by CalMac are indebted to him for mentioning European regional development fund money and asking what the EEC would make of the disposal of assets, that have been built up by grants made on grounds of peripherality and social circumstances, to the first chancer who wields a bit of influence with this shower in the Government. I do not think that the EEC would think much of that. It would not be a good precedent. That is one of the reasons why the CalMac privatisation has been abandoned, at least for the time being.

Mr. Macdonald: Does my hon. Friend agree that one of the outstanding projects is the supply of a new vessel for the Stornoway-Ullapool route? It will require a great deal of EEC assistance. It would be a disgrace if the money were provided and the vesssel ended up in private hands. Can my hon. Friend ascertain whether the Government have contributed their share? Perhaps tonight is a good opportunity for them to tell us about the vessel for that route.

Mr. Wilson: rose—

Mr. Deputy Speaker: Order. Not in the debate on the money resolution.

Mr. Wilson: I am sure that if the Minister wanted, as an act of unrehearsed largesse, to promise a new Vote for a vessel for the Stornoway-Ullapool route, you, Mr. Deputy Speaker, would be tolerant of that initiative.
A few weeks ago, I attended a meeting in Oban at which opposition to this privatisation nonsense was rallied. I heard a representative of CalMac say that there were no plans to replace the Suilven, which plies the Stornoway-Ullapool route, until 1995. That was probably

disappointing news for people who use the service. I must say that, out of route loyalty, I always use the ferry Hebridean Isles.

Mr. Dick Douglas: Will my hon. Friend apply his mind to the important issue of the disposal of public money and the relationship between what will be left of the Scottish Transport Group, Caledonian MacBrayne and Western Ferries? It is proposed that they should coalesce. We have considered what will happen to the Gourock-Dunoon ferry service. A board is to be appointed by the Secretary of State. We do not know what its composition will be. A private company already exists. The Secretary of State's instructions to coalesce to determine what will happen to this vital route—

Mr. Deputy Speaker: Briefly, please.

Mr. Douglas: I am making a serious point.

Mr. Deputy Speaker: Order. The hon. Gentleman knows that interventions should be brief. If he wishes to make a speech, perhaps he will seek to catch my eye later.

Mr. Douglas: My hon. Friend is taking on board my point about the interrelation between the two companies and the fact that we have not considered the important aspect of safety. I am an old-fashioned Clyde builder, and am in no doubt that safety considerations have to be borne in mind.

Mr. Wilson: My hon. Friend makes a number of important points which flow directly from my reply to my hon. Friend the Member for Western Isles (Mr. Macdonald). I am informed that the Suilven is not to be replaced until 1995. Would it ever be replaced if the company were in private hands by then? From where will the money come for the replacement of the fleet?
The point raised by my hon. Friend the Member for Dunfermline, West (Mr. Douglas) is relevant because, on the Clyde coast and the Western Isles routes, we have only one precedent of a private operator of ferry services. Western Ferries operates the Gourock to Hunter's Quay route. Anyone who knows anything about that knows that Western Ferries has been plying on that route for 20 years with small, second-hand ferries which many people will not use because they much prefer the larger Caledonian MacBrayne ferries and because they are in no way comparable with the ferries that the public sector company has provided.
If for 20 years Western Ferries has been unable to replace a single, small vehicular ferry in the private sector, what possible prospect is there in 1995 of a privatised Caledonian MacBrayne, stripped of EEC aid because of the irresponsible conduct of Ministers in selling it off in the first place, providing a new ferry of that size and capacity?

Mr. Neil Hamilton: The hon. Gentleman will be aware that Conservative Members have been listening with rapt attention and following with considerable interest the many compelling points that he has made in his usual lucid and eloquent way, but he must be aware that he has been speaking for about two thirds of the allotted time for the money resolution. We are concerned only that those of us who have open minds and want to hear the variety of views available from Opposition Members will be denied that opportunity. Will he tell us why he is filibustering to prevent—

Hon. Members: Order.

Mr. Deputy Speaker: Order. The occupant of the Chair will make a judgment about whether hon. Members are in order. So far, the hon. Gentleman has very skilfully kept in order.

Mr. Wilson: The hon. Member for Tatton (Mr. Hamilton) is a fairly dismissable figure, and his interest in the matter is demonstrated by the fact that his first appearance in the debate was very recent. However, there will be many debates when the hon. Gentleman can depart early from his favourite bierkeller and participate in debates on Scottish matters. We shall welcome the hon. Gentleman. I am reminded of the joke that we can see a lump on the hon. Gentleman's sleeve where the armband used to be.

Mr. Darling: Sub-paragraph (ii) says that guarantees can be given by the Secretary of State. Does that not mean that it lies with the Secretary of State to guarantee sums to replace the boat operating on the Stornoway to Ullapool route, perhaps with a vessel similar in design to the Hebridean Isles, on which we met one summer morning two years ago? We commented on how uncharacteristic of Caledonian MacBrayne vessels it was—it was comfortable and pleasant. If the Government wanted, they could provide the guarantees necessary to replace that boat. The Scottish Transport Group promised me that it would be replaced in 1992, not 1995.

Mr. Wilson: I am open to correction, but I think that the date was as I heard it.
I have been trying for some time to move on from sub—paragraph (ii) and the specific shipping aspects of the money resolution. It was gross impertinence for the hon. Member for Tatton to suggest that there has been procrastination. There is much in the measure about which to talk and we intend to use every minute of our time to do so, without his unwanted interventions.

Mr. Macdonald: Will my hon. Friend give way?

Mr. Wilson: For the last time, on sub-paragraph (ii).

Mr. Macdonald: My hon. Friend is being hasty in trying to move from sub-paragraph (ii). He mentioned cross-subsidisation, the loss of routes threatened by privatisation and the effect on other Caledonian MacBrayne routes that remain in public hands. My hon. Friend said that there would be one of two effects—diminution of service or fare increases. He is wrong. There will be both effects.
Does my hon. Friend agree that there will also be a third effect—the severe impact on the economy of the outer islands? That economy depends on the price of goods and quality of services provided from the mainland by Caledonian MacBrayne ferries. The islands suffer already from having to import all their goods and export all their products via the ferries. Any increase in fares and diminution in services must severely affect the economy of the Western Isles.

Mr. Deputy Speaker: Order. This has been a wide debate, but it cannot go as wide as a discussion on the economy of the Western Isles. Perhaps the hon. Member for Cunninghame, North (Mr. Wilson) will address himself to the money resolution.

Mr. Wilson: I am tempted. A case can be made for saying that there is an impact, because nothing leaves or enters the Western Isles except by Caledonian MacBrayne ferry. Anything that the Government do to undermine that company is a threat to the economy of the Western Isles. There would not be much weaving, crofting, fishing or fish farming, an industry in which a large amount of public money has been invested—

Mr. Deputy Speaker: Order. I am interested not in those matters but in the scope of the debate on the money resolution. All that is outside the scope of the money resolution.

Mr. Wilson: I respect your ruling, Mr. Deputy Speaker. These matters were opened because of the broadness of sub-paragraph (ii), which refers to
sums required for fulfilling any guarantee given by the Secretary of State in respect of sums borrowed by Caledonian MacBrayne Limited, David MacBrayne Limited and any subsidiary of theirs
being written off by the Secretary of State at some future time.
There are so many issues on which I have not yet commented that I must move on to sub-paragraph (iii). It is the catch-all, as my hon. Friend the Member for Monklands, West said a long time ago. It states:
any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of the Act".
As one of my hon. Friends said, that is the original blank cheque. There is power to pay for anything that arises from the legislation. I return indignantly to the intervention by the hon. Member for Tatton. It was offensive and unacceptable to complain about reasoned and rational discussion of the measure taking place over a modest 45-minute period, given the powers involved in it.
This takes us back to the issue of bus privatisation. In the short term at least, that is undoubtedly where most of the expenses will arise. I hope that we shall hear from the Minister on this matter before the end of the debate. I recognise his suitability to deal with the legislation because he did once travel on a bus. That reminds me of a story about the Minister. When he got on the bus, the conductor said to him, "Where do you want to go?" and he said, "132, Belgravia". He was accustomed to taking taxis.
The breaking up of the Scottish Bus Group into 11 constituent companies, the marketing of those companies, the bureaucracy and the merging in some cases of the existing administration of bus companies had been mentioned before the daft notion was raised of moving the offices of Caledonian MacBrayne from Gourock to Oban. All of that is expensive.

Mr. Norman Buchan: I am sure that my hon. Friend is as puzzled about this as I am. The Government point to the expense of public bodies and say that they should save money by passing it over to the private sector. Why does sub-paragraph (iii) state:
any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of the Act",
when the purpose of the Act is to make public bodies less expensive, as they are supposed to be uneconomic and inefficient, and, above all, to save money?

Mr. Wilson: As I would expect from my erudite colleague, he has made the precise philosophical point.


We know that this is not about saving public money; it is about selling public assets on the cheap, yet the Government will have to dole out money to pay for that. It is apparent from sub-paragraph (iii) that it will not even be a self-financing exercise and is therefore very misguided.
I regret that I have not been able to deal with sub-paragraph (iv) and I wish that we could return another evening to discuss that.
I shall end by dealing with paragraph (b). These moneys are to be spent on purposes that we regard as unworthy and unwanted in Scotland. The Bill is an imposition on the Scottish people. It is not an earth-shattering piece of legislation, but an irritating piece of legislation. That is why we oppose it and why we shall try to improve it in Committee.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): Is the hon. Gentleman aware that subsidies are provided under the Highland and Islands (Shipping Services) Act 1960? That is different matter from this money resolution.

Mr. Wilson: There is a thin line between the general financing of Caledonian MacBrayne and the specific question of subsidies to Caledonian MacBrayne. It would be careless to us to assume that the residue of money—I hope that this will never happen if Caledonian MacBrayne—

It being three-quarters of an hour after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14

(Exempted Business);—

The House divided: Ayes 158, Noes 57.

Division No. 20]
[1.29 am


AYES


Adley, Robert
Coombs, Simon (Swindon)


Aitken, Jonathan
Cope, Rt Hon John


Alison, Rt Hon Michael
Cran, James


Amess, David
Davies, Q. (Stamf'd &amp; Spald'g)


Amos, Alan
Davis, David (Boothferry)


Arbuthnot, James
Day, Stephen


Arnold, Jacques (Gravesham)
Devlin, Tim


Arnold, Tom (Hazel Grove)
Dorrell, Stephen


Ashby, David
Douglas-Hamilton, Lord James


Aspinwall, Jack
Dunn, Bob


Atkinson, David
Durant, Tony


Baker, Nicholas (Dorset N)
Fallon, Michael


Batiste, Spencer
Favell, Tony


Beaumont-Dark, Anthony
Fenner, Dame Peggy


Bellingham, Henry
Fishburn, John Dudley


Bendall, Vivian
Forman, Nigel


Bennett, Nicholas (Pembroke)
Forsyth, Michael (Stirling)


Bevan, David Gilroy
Forth, Eric


Body, Sir Richard
Franks, Cecil


Bonsor, Sir Nicholas
Freeman, Roger


Boscawen, Hon Robert
French, Douglas


Bottomley, Peter
Garel-Jones, Tristan


Bowden, Gerald (Dulwich)
Gill, Christopher


Bowis, John
Goodhart, Sir Philip


Boyson, Rt Hon Dr Sir Rhodes
Goodson-Wickes, Dr Charles


Brazier, Julian
Gorman, Mrs Teresa


Bright, Graham
Gow, Ian


Burt, Alistair
Greenway, John (Ryedale)


Butterfill, John
Griffiths, Peter (Portsmouth N)


Campbell, Menzies (Fife NE)
Grist, Ian


Carrington, Matthew
Ground, Patrick


Cash, William
Hamilton, Hon Archie (Epsom)


Chalker, Rt Hon Mrs Lynda
Hamilton, Neil (Tatton)


Channon, Rt Hon Paul
Hanley, Jeremy


Chapman, Sydney
Hannam, John


Conway, Derek
Hargreaves, A. (B'ham H'll Gr)


Coombs, Anthony (Wyre F'rest)
Hargreaves, Ken (Hyndburn)





Harris, David
Nicholls, Patrick


Hawkins, Christopher
Nicholson, David (Taunton)


Hayes, Jerry
Nicholson, Emma (Devon West)


Hayward, Robert
Paice, James


Heathcoat-Amory, David
Peacock, Mrs Elizabeth


Hind, Kenneth
Porter, Barry (Wirral S)


Holt, Richard
Porter, David (Waveney)


Howarth, Alan (Strat'd-on-A)
Portillo, Michael


Howarth, G. (Cannock &amp; B'wd)
Redwood, John


Hunt, David (Wirral W)
Riddick, Graham


Hunter, Andrew
Rifkind, Rt Hon Malcolm


Irvine, Michael
Roberts, Wyn (Conwy)


Jack, Michael
Roe, Mrs Marion


Janman, Tim
Sackville, Hon Tom


Jones, Robert B (Herts W)
Sayeed, Jonathan


Kirkhope, Timothy
Shephard, Mrs G. (Norfolk SW)


Knapman, Roger
Shepherd, Colin (Hereford)


Knight, Dame Jill (Edgbaston)
Sims, Roger


Lang, Ian
Smith, Sir Dudley (Warwick)


Latham, Michael
Smith, Tim (Beaconsfield)


Lawrence, Ivan
Speller, Tony


Lennox-Boyd, Hon Mark
Spicer, Sir Jim (Dorset W)


Lightbown, David
Spicer, Michael (S Worcs)


Lilley, Peter
Squire, Robin


Lord, Michael
Stanbrook, Ivor


Lyell, Sir Nicholas
Stern, Michael


Mans, Keith
Stevens, Lewis


Marland, Paul
Stewart, Allan (Eastwood)


Martin, David (Portsmouth S)
Stradling Thomas, Sir John


Mawhinney, Dr Brian
Summerson, Hugo


Mayhew, Rt Hon Sir Patrick
Taylor, John M (Solihull)


Meyer, Sir Anthony
Temple-Morris, Peter


Michie, Mrs Ray (Arg'l &amp; Bute)
Thompson, D. (Calder Valley)


Miller, Sir Hal
Thurnham, Peter


Mitchell, Andrew (Gedling)
Waddington, Rt Hon David


Monro, Sir Hector
Wallace, James


Montgomery, Sir Fergus
Waller, Gary


Moore, Rt Hon John
Wells, Bowen


Morris, M (N'hampton S)
Widdecombe, Ann


Morrison, Sir Charles
Wiggin, Jerry


Morrison, Rt Hon P (Chester)



Moss, Malcolm
Tellers for the Ayes:


Nelson, Anthony
Mr. David Maclean and


Neubert, Michael
Mr. Kenneth Carlisle.




NOES


Abbott, Ms Diane
Lewis, Terry


Anderson, Donald
Lloyd, Tony (Stretford)


Banks, Tony (Newham NW)
McAllion, John


Barnes, Harry (Derbyshire NE)
McAvoy, Thomas


Bennett, A. F. (D'nt'n &amp; R'dish)
Macdonald, Calum A.


Buchan, Norman
McKelvey, William


Buckley, George J.
McLeish, Henry


Campbell, Ron (Blyth Valley)
Marshall, David (Shettleston)


Canavan, Dennis
Martin, Michael J. (Springburn)


Clarke, Tom (Monklands W)
Maxton, John


Clelland, David
Nellist, Dave


Cohen, Harry
O'Neill, Martin


Cryer, Bob
Patchett, Terry


Cummings, John
Pike, Peter L.


Darling, Alistair
Reid, Dr John


Davies, Ron (Caerphilly)
Ross, Ernie (Dundee W)


Dixon, Don
Salmond, Alex


Douglas, Dick
Sedgemore, Brian


Evans, John (St Helens N)
Sillars, Jim


Ewing, Mrs Margaret (Moray)
Skinner, Dennis


Foster, Derek
Strang, Gavin


Foulkes, George
Turner, Dennis


Fyfe, Maria
Vaz, Keith


Galbraith, Sam
Welsh, Michael (Doncaster N)


Galloway, George
Wilson, Brian


Graham, Thomas
Wray, Jimmy


Haynes, Frank



Home Robertson, John
Tellers for the Noes:


Howarth, George (Knowsley N)
Mr. Jimmy Dunnachie and


Ingram, Adam
Mr. Jimmy Hood.


Leadbitter, Ted

Question accordingly agreed to.

Resolved,
That, for the purposes of any Act resulting from the Transport (Scotland) Bill, it is expedient to authorise—

(a) the payment out of money provided by Parliament of—

(i) any expenditure of the Secretary of State in connection with the dissolution of the Scottish Transport Group;
(ii) sums required for fulfilling any guarantee given by the Secretary of State in respect of sums borrowed by Caledonian MacBrayne Limited, David MacBrayne Limited and any subsidiary of theirs;
(iii) any increase in payments out of money so provided arising from any increase in administrative expenses of the Secretary of State attributable to the provisions of the Act; and
(iv) any increase attributable to the Act in payments out of money so provided under any other enactment;

(b) any payment into the Consolidated Fund under the Act.

Orders of the Day — Statutory Instruments, &c.

Mr. Deputy Speaker (Mr. Harold Walker): With the leave of the House, I shall put together the three motions on legal aid and advice, Scotland.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &amp;c.).

LEGAL AID AND ADVICE, SCOTLAND

That the draft Advice and Assistance (Scotland) (Prospective Cost) (No. 3) Regulations 1988, which were laid before this House on 23rd November, be approved.—[Mr.Neubert.]

That the draft Advice and Assistance (Assistance by Way of Representation) (Scotland) Regulations 1988, which were laid before this House on 23rd November, be approved.—[Mr. Neubert.]

That the draft Legal Aid (Scotland) Act 1986 Amendment Regulations 1988, which were laid before this House on 23rd November, be approved—[Mr. Neubert.]

Question agreed to.

Orders of the Day — PETITION

Channel Tunnel Rail Link (Gravesham)

Mr. Jacques Arnold: I wish to present a petition signed by 3,178 residents of the villages of Istead Rise and New Barn within the Gravesham constituency. The signatories include County Councillor Marven and Borough Councillors Barnes and Turner, who represent the area on the respective councils.
The significance of the scope of the petition is apparent in that the 3,178 signatories come from villages that have only 3,713 electors on their rolls. That is a very clear expression of the intense feelings aroused. Following considerable confusion in presentation, British Rail has published draft proposals for routes 1 and 2 of its high-speed rail link, which would run above ground close to those villages. The routes would have a profound impact on the environment of the area.
The prayer of the petition consequently reads:
'Wherefore your Petitioners pray that your Honourable House urge British Rail to respect the wishes of those living in the affected area of Kent that no new railway line shall be built in the vicinity of Istead Rise and New Barn.'

To lie upon the Table.

Manchester International Airport

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

Sir Fergus Montgomery: One lesson that I have learned is never to have an Adjournment debate after Scottish business.
I am most grateful for the opportunity to raise this important issue on the Adjournment, because Manchester airport is the biggest single employer in my constituency. More of my constituents work for Manchester airport than for any other single employer. The Government have often stated their intention to develop Manchester airport as an international gateway outside London to complement Heathrow and Gatwick and thus provide the necessary route infrastructure for British industry, commerce and leisure.
For some time we have been told of the congestion in the south-east, so I should think that anything that would take traffic from the south-east to the north would be welcomed. We are anxious that people flying to other continents do not have to take the shuttle to London, change planes and fly on from there. We want to increase the number of intercontinental flights in and out of Manchester. In that regard I am grateful to the Government for the enormous progress that has been made since 1979. However, like Oliver Twist, I am never satisfied.
On 28 and 29 November negotiations took place in Washington to consider outstanding licence applications by United States carriers to serve routes between Manchester and points in the United States and the reciprocal benefits that will be available for British airlines as part of a negotiated agreement between the United Kingdom and United States Governments. Hopes were high that the negotiations would be successful and that we would have new routes across the Atlantic using Manchester airport. Those routes would bring substantial benefits to the tourist industry outside London and to the northern business traveller crossing the atlantic. They would mean improved services and time saving and a boost to the regional economy.
Recently the university of Salford made a study to show a stimulus to the north-west in the order of an additional £40 million a year and the creation of about 3,000 permanent new jobs merely as the consequence of the three new routes across the Atlantic that have been applied for by United States carriers. Those are not idle requests. About a year ago, discussions between the Department of Transport and Manchester airport regarding the potential for new routes between the United States and Manchester led to a visit by a top-level team from Manchester airport to several United States airlines. Subsequently, three airlines—Pan Am, American Airlines and Northwest—all made applications to the United States Department of Transport to serve Manchester. These are three highly respected airlines with astute route-planning procedures which have identified the Manchester market as being a prime area of interest and which see an attractive commercial return.
More United States airlines are trying to get into Manchester airport than any other airport in the world. The reason is not hard to find. It is because demand so clearly exists. That demand is frustrated to the tune of 1

million passengers a year who cannot, on the availability of current services, travel directly from Manchester airport. That is wholly unacceptable when one considers that within two hours' drive of Manchester we have 60 per cent. of United Kingdom manufacturing industry and over 20 million people. As we see improvements in the national economy moving further and further north, as they are, through the manufacturing sector and the new vibrant financial and high-tech centres based in the north-west, we can anticipate a significant increase in trans-atlantic travel.
In the north-west we have been fighting the battle for Manchester airport for some years and we were hopeful that the negotiations in Washington would bear fruit. I am told that a great deal of creative thinking by the British Government was evident and a major exercise was mounted to achieve an appropriate settlement which would allow increased United States' access to Manchester airport. In return the Government rightly sought significant opportunities for British airlines from London airports as a balancing effect.
I am saddened that at this stage British airlines do not seem keen to pursue the opportunities which are already open to them for flights across the Atlantic from Manchester and that the focus of their attention should be on new services from London. That is a matter for regret, but I have to acknowledge and accept that the commercial decisions of the British airlines are affected by their specific equipment and crew resource levels. However. what should be recognised is that Manchester airport's successful foray to engender interest by United States airlines in services to Manchester presents a rare opportunity for British airlines to derive some advantage from a round of negotiations.
This opportunity must not be squandered. The national interest would be well served by the development of new routes into Manchester because of the enormous net economic benefit to the whole of the United Kingdom. The further benefits which can be achieved for British airlines from an agreement operating out of London is an added bonus. The British negotiating team—I confess that I was delighted to hear that the marketing director of Manchester airport was included in the Washington talks for the first time—must be given the full support of the Government to achieve a successful conclusion with a realistic balance of aviation rights and major economic benefits for this country.
I am told that the talks will resume on 4 January 1989 in London and it is essential that the settlement be completed to allow the airlines to start operating in the summer of 1989. Failure to reach an agreement could mean that the Americans would lose interest and not come back for a third time to seek rights into Manchester. I think the Minister will agree that it would be a considerable loss to the United Kingdom if United States carriers are forced to look elsewhere. For example, there are other countries that are only too happy to welcome United States airlines with open arms.
We need a settlement urgently which allows for growth in the services out of Manchester across the Atlantic with consequential benefits to British aviation. 1 believe that the will is there on all sides and the potential benefits are enormous. I ask my hon. Friend to tell the negotiators to do all they can to reach an agreement on this occasion to the benefit of all.


Other major opportunities await Manchester airport. Singapore Airlines has applied for a daily service into Manchester—at the moment, it is restricted to only two services a week. This year, my wife and I went to the Commonwealth Parliamentary Association conference in Australia. We decided that the best way to get there was to fly by Singapore Airlines from Manchester direct to Singapore. On 6 July, I went to book seats on the Manchester-Singapore flight for Saturday 10 September, and we were wait-listed. That should prove the popularity of the route.
Hong Kong, which is served by British Airways, is seen by Cathay Pacific as a possible route, and it has applied for rights to fly from Manchester to Hong Kong. This application has also run into difficulty, and no progress has been made, even though the Hong Kong Department of Aviation approved traffic rights two years ago.
It is known throughout the aviation world that the Manchester case is an extremely good one. The level of interest engendered in Manchester airport in the past 12 months presents an opportunity that must not be lost. If the negotiations with the United States are successful and if Hong Kong and Singapore should reach similar conclusions—with benefits for British aviation and the economy—it will mean an enormous boost for the United Kingdom and particularly the north. Some 20 million people have high hopes and high expectations of getting equal treatment with those who live in the south-east. I hope that my hon. Friend will show the Government's wholehearted commitment to the north and Manchester airport in particular.

The Minister for Public Transport (Mr. Michael Portillo): I warmly congratulate my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) on having obtained this Adjournment debate. He has pursued this subject with tremendous commitment and has shown a deep understanding of the problem, which demonstrates his true interest in the subject and his genuine concern for the airport, for the region in which it is situated and for the United Kingdom as a whole. The quality of his speech was all the more striking because it was the first sensible speech that we had heard for a couple of hours, and that was welcome. I am grateful to my hon. Friend for providing me with this opportunity to remind the House of the Government's considerable successes in its policy of expanding services from the regional airports, and also to explain the reasons why progress on increasing United States services to Manchester has not been as speedy as we would all have liked.
In 1985 the Government published their White Paper on airports policy. This confirmed unequivocally our commitment to encourage the use and development of our regional airports so that they can meet the maximum demand they can attract. Such developments benefit passengers to and from the regions by offering them more convenient services. Better use is made of the existing infrastructure as our regional airports, and the road networks providing access to them, are generally less congested than those in the south-east. Thriving regional airports also provide direct and indirect employment in their local area.

Of course, for airports to expand, it is crucial to attract the airlines. Airports such as Manchester have been doing a very valuable job in encouraging airlines to recognise that there is a market that they can serve successfully at Manchester. Where traffic rights do not exist, airports should make it clear to airlines, and through them to foreign Governments, that such rights are worth negotiating.
The Government take the lead in negotiating air traffic rights for United Kingdom airlines to fly to international destinations, and for foreign airlines to fly to United Kingdom airports. As set out in the airports White Paper, we are committed to the creation of wider opportunities for airlines when conditions of competition are fair and British interests are not prejudiced. We have taken the lead in the move towards liberalisation of air services in Europe and we have successfully negotiated a liberal air services agreement with Canada. As a result, both Canadian and United Kingdom-designated airlines are completely free to operate services between any airport in either country's territory. That has already resulted in a significant increase in intercontinental services from our regional airports.
During 1988, Birmingham, Leeds/Bradford, Cardiff and Newcastle have all offered regular scheduled services to Toronto. Manchester has also offered services to other Canadian destinations, such as Calgary, Edmonton, Vancouver and Halifax.
Over the last decade, traffic at regional airports has grown by 92 per cent. compared with only 59 per cent. at the British Airport Authority's London airports. Growth at Manchester has been more than 150 per cent., and that airport now operates scheduled services to more than 60 foreign destinations. That includes services to eight points in North America and the Caribbean, and to another eight intercontinental destinations in Australia, India, the middle east and the far east.
The possibility to which my hon. Friend alluded, of introducing more liberal air service arrangements in respect of Singapore, is currently being examined at Government level. There will be a further meeting between United Kingdom and Singapore aeronautical authorities early next year.
Nevertheless, there are examples where, despite our endeavours, we have been unable so far to negotiate wider opportunities for airlines to serve our regional airports. The main example, of course, is the subject of tonight's Adjournment debate—access by United States airlines to Manchester airport. We must recognise that our aviation relations with the United States of America are very different from those with, say, Canada. We were able to persuade the Canadian authorities that a liberal air services agreement was in all our interests. However, the United States authorities take a far more protectionist attitude towards access to the major American market. The air services agreement between the United States and the United Kingdom is founded on the principle that there is a broad balance of opportunities for each country's airlines. If the Americans are given new rights at Manchester, balancing concessions are needed for United Kingdom carriers in the United States.
In 1986, as a gesture of goodwill, we gave American Airlines a temporary permit to operate services between Chiacgo and Manchester—a valuable new right, for which we still have received nothing in return. That gesture is not


something we can repeat if we are to retain the strong United Kingdom aviation industry of which we are rightly proud.
For a considerable time, the United States Government showed no interest in coming to the negotiating table to discuss further access to Manchester. They claimed that their airlines had no interest in such services. But Manchester airport successfully persuaded some United States carriers that Manchester and the north-west offered their own substantial market for additional United States services, and the American Government were finally persuaded to the negotiating table in March of this year.
At those talks, we offered the United States a very reasonable package, taking account of the benefits that will accrue to Manchester and the north-west from additional United States services. We were prepared to agree to the immediate commencement, in the summer 1988 season, of a daily direct Manchester to Boston service and daily one-stop Manchester to New York service, as well as putting the Manchester to Chicago service on a permanent footing.
However, the American team insisted that any package must permit the immediate commencement of all the services it sought, including two separate daily New York to Manchester services operated by two large United States carriers. That would have seriously jeopardised British Airways' daily service on that route—and Manchester airport, which was consulted frequently during the course of the negotiations, advised that the retention of BA's service was its top priority.
The United States Government then made it clear that they were not interested in further talks before 1989. Eventually, we persuaded them back to the negotiating table in late November, in Washington. We were disappointed that a final agreement did not emerge at those talks, but not, I must say, surprised—bearing in mind the fact that the United States authorities had clearly indicated that they would not be prepared to reach agreement in a single round of consultations.
However, those negotiations were of value. There was a useful exchange of views, and the two sides explored a number of new ideas for developing an appropriate package as the basis for agreement. A Manchester airport representative was included in the United Kingdom delegation throughout. At the conclusion of the talks, we agreed to meet again as soon as mutually possible. We proposed dates in December and early January, and 4 and 5 January was recently agreed, as my hon. Friend said. Meanwhile, both sides are further examining each other's ideas, and the Government hope very much that a satisfactory settlement will soon be reached.
There is, however, a very important point to bear in

mind. The United States Government must be in no doubt that if agreement is to be reached, they must be prepared to pay a reasonable price. Our demands will not be excessive. We recognise the advantages for Manchester and the north-west and we shall take them fully into account. But there must also be advantages for United Kingdom airlines. The United States negotiators watched very closely the reactions of Manchester airport and its supporters to the breakdown of talks in March. They will also be monitoring this debate tonight. No doubt they are still hoping that the Government will acquiesce in the face of domestic pressure, and give them traffic rights to Manchester for little or nothing in return. If so, they are mistaken. There must be mutual benefits.
My hon. Friend is concerned that unless we reach a satisfactory settlement in January, the United States airlines will lose interest in Manchester and look elsewhere. The Government are equally concerned that there should be a successful outcome to the January negotiations. But if there is not, and if the United States airlines have a genuine interest in serving Manchester, they will no doubt press their Government to continue the negotiations. Looking elsewhere in Europe to mount services is unlikely to be an attractive alternative. The vast majority of countries demand reciprocal benefits for their airlines in exchange for wider access for foreign carriers. The British Government are far from being alone in pursuing that policy in their negotiations with foreign Governments.
Our policy reflects careful consideration and extensive consultations. We are not about to set it aside and ignore the interests of United Kingdom airlines in the very difficult and demanding United States aviation environment. Allowing access to Manchester for nothing in return would not be in anyone's long-term interest.
Of course the Government wish to increase traffic to the regional airports, of which Manchester is the leading candidate, but the interests of the nation as a whole and, ultimately, of the regional airports too, demand that we have a strong aviation industry. The agreement reached over Manchester must not ignore the interests of the United Kingdom aviation industry.
I hope that this short debate has been an opportunity for me to reassert to my hon. Friend the considerable importance that we attach to Manchester airport, the great pleasure we have derived from seeing it thrive and prosper and the great pleasure it would give us to be able to conclude an agreement that brought more services to Manchester, if that could be attained on terms that were of mutual benefit to the two countries involved.

Question put and agreed to.

Adjourned accordingly at two minutes past Two o'clock.